HARRINGTON FAMILY HEALTH CENTER

Finding Number: 2025 002 Finding Type: Noncompliance Information on the Federal Program: N/A – Not program specific Criteria: 2 CFR §200.512(a)(1) requires the reporting package and data collection form to be submitted to the Federal Audit Clearinghouse (FAC) no later than 30 calendar days after receipt of the auditor’s reports or nine months after the end of the audit period, whichever is earlier. Condition: FAC filing for the fiscal year ended March 31, 2025 was submitted after the required deadline. Cause: The Organization did not have effective internal controls to ensure timely and accurate preparation of financial information, including account reconciliations (see prior year Finding 2024-002). As a result, management did not have the information necessary to complete the FAC filing within the timeframe required by 2 CFR §200.512(a)(1). Effect: The late submission of the Single Audit report to the Federal Audit Clearinghouse creates noncompliance with federal reporting requirements and increases the Organization’s risk of administrative actions by federal awarding agencies, including Health Resources and Services Administration (HRSA). This may result in delayed acceptance of federal awards, imposition of grant conditions, or restrictions on access to federal funds until the report is submitted and accepted. Questioned Costs: None Repeat Finding: Yes, 2024 002 Recommendation: The Organization should implement procedures to ensure the Single Audit reporting package is prepared, reviewed, and submitted to the FAC within required timeframes, including monitoring of statutory deadlines Views of a Responsible Official and Corrective Action Plan: Management agrees with the finding. Management is implementing procedures to complete and review account reconciliations and financial reporting on a monthly basis with appropriate oversight. These steps are intended to support timely submission of future Single Audit reporting packages to the FAC+.

Finding Number: 2025 003 Finding Type: Significant Deficiency in Internal Controls over Compliance related to Special Tests and Provisions and Noncompliance Information on the Federal Program: Program Name: Health Center Program Cluster (93.224) Grant Award: H80CS00802 Budget Period: April 1, 2024 through March 31, 2025 Agency: U.S. Department of Health and Human Services, Health Resources and Services Administration Criteria: In accordance with Section 330(k)(3)(G) of the Public Health Services Act (42 U.S. Code § 254b), as an FQHC, the Organization must have a sliding fee discount program in which patient charges are adjusted based on the patient’s ability to pay. Condition: During testing of a statistically valid sample of 19 patient accounts that received sliding fee discounts, 2 patient files did not contain eligibility documentation to support that the patients qualified for the sliding fee discount at the time the discount was applied. Cause: Controls over the Sliding Fee Discount Program did not consistently ensure that eligibility documentation was obtained and maintained prior to application of discounts. A similar compliance issue was identified in prior year Finding 2024-003; however, corrective actions could not be implemented during the current audit period due to the timing of issuance of the prior year audit report. Effect: Without documented eligibility at the time discounts were applied, the Organization cannot demonstrate that sliding fee discounts were properly supported in accordance with Health Center Program requirements. Questioned Costs: None Repeat Finding: Yes, 2024-003 Recommendation: Management should strengthen controls over the Sliding Fee Discount Program to help ensure eligibility documentation is obtained, documented, and maintained prior to the application of discounted charges. Management should also reinforce procedures for timely completion and retention of eligibility determinations and periodically monitor patient files for completeness. Views of a Responsible Official and Corrective Action Plan: Management agrees with the finding and will implement procedures to ensure sliding fee discount eligibility is documented and maintained prior to application of discounted charges and will strengthen monitoring of eligibility determinations and renewal requirements.

Finding Number: 2024-002 Finding Type: Noncompliance Information on the Federal Program: N/A – Not program-specific Criteria: 2 CFR Section 200.512(a) requires the reporting package and data collection form to be submitted to the Federal Audit Clearinghouse (FAC) the earlier of 30 calendar days after the reports are received from the auditor or nine months after the end of the audit period. Condition: FAC filing for fiscal year ended March 31, 2024 was submitted late. Cause: The Organization did not have effective internal controls to ensure timely and accurate preparation of financial information, including account reconciliations (see Finding 2024.001). As a result, management did not have the information necessary to complete the FAC filing within the timeframe required by 2 CFR §200.520(a). Effect: The late submission of the Single Audit report to the Federal Audit Clearinghouse creates noncompliance with federal reporting requirements and increases the Organization’s risk of administrative actions by federal awarding agencies, including Health Resources and Services Administration (HRSA). This may result in delayed acceptance of federal awards, imposition of grant conditions, or restrictions on access to federal funds until the report is submitted and accepted. Questioned Costs: None Repeat Finding: Yes, 2023-002 Recommendation: The Organization should implement procedures to ensure that account reconciliations and financial reporting are completed in a timely manner, enabling the Single Audit reporting package to be submitted to the Federal Audit Clearinghouse within the required timeframe. Views of a Responsible Official and Corrective Action Plan: Management agrees with the finding. The Organization is implementing procedures to complete and review account reconciliations and financial reporting on a monthly basis, with appropriate oversight and staffing. These steps are intended to ensure that future Single Audit reporting packages are submitted to the Federal Audit Clearinghouse within the required timeframe.

Finding Number: 2024-003 Finding Type: Significant Deficiency in Internal Controls Over Compliance related to Special Tests and Provisions Information on the Federal Program: Program Name: Health Center Program Cluster (93.527) Grant Award: 5 H80CS00802-22 Budget Period: April 1, 2023 through March 31, 2024 Agency: U.S. Department of Health and Human Services, Health Resources and Services Administration Pass Through Entity: N/A Criteria: In accordance with Section 330(k)(3)(G) of the Public Health Services Act (42 U.S. Code § 254b), as an FQHC, the Organization must have a sliding fee discount program in which patient charges are adjusted based on the patient’s ability to pay. Condition: Through testing a statistically valid sample of 25 individual patient balances, we noted one instance in which the sliding fee discount applied was inconsistent with the Organization’s policy. Based on income and family size, the patient received a discount of $115 but qualified for a discount of $215, resulting in a $100 difference. Cause: The application of sliding fee discounts to patient accounts involves manual processes, which are inherently susceptible to errors. The Organization does not currently have a formal monitoring process or policy to ensure discounts are applied correctly, which increases the risk that errors may occur and go undetected. Effect: It is possible that sliding fee discounts may not be applied consistently across all patient accounts, and errors may not be identified and corrected in a timely manner, which could result in noncompliance with the Organization’s sliding fee discount program and federal program requirements. Questioned Costs: None Repeat Finding: No Recommendation: The Organization should establish a formal procedure to monitor compliance with its sliding fee discount program. The procedure should assign responsibility for reviewing applied discounts, define the frequency and sample size of reviews, and include consideration for differences between the Medical and Dental systems, with a larger or more frequent sample for Dental due to higher manual processing and volume. The procedure should also include steps to document and correct any errors identified and require supervisory oversight to verify that reviews are performed consistently. Implementing this procedure will help ensure discounts are applied accurately and in accordance with the Organization’s policy and federal requirements. Views of a Responsible Official and Corrective Action Plan: Management agrees with the finding and will develop and implement the recommendations above.

Criteria - 2 CFR Section 200.512(a) requires the reporting package and data collection form to be submitted to the Federal Audit Clearinghouse the earlier of 30 calendar days after the reports are received from the auditor or nine months after the end of the audit period Condition - The March 31, 2023, Single Audit reporting package and data collection form was filed eleven months after the fiscal year end. Cause - The Center was unable to timely reconcile accounts receivable detail to the general ledger which caused the audit to be delayed. Effect - There was a late filing of the Single Audit reporting package and data collection form by two months. Question Costs - None. Recommendation - We recommend the Center take necessary steps to insure all accounts are timely reconciled to the general ledger to ensure the audit is not delayed. Repeat Finding - No. Views of Responsible Officials - The Center concurs with the finding and will purchase new software and implement regular reconciliation procedures for accounts receivable.