Four Corners Primary Care Centers, Inc.Non-Profit

2020-001 Encumbrance of Federal Property Criteria: The Uniform Guidance states that grant recipients shall not encumber property purchased with Federal funds without approval from the Federal awarding agency. Condition: The Organization?s property is encumbered by a line of credit. Cause of Condition: The Organization used property and equipment as well as other assets as collateral to obtain a $125,000 line of credit from a bank without requesting permission from the Federal awarding agency. Effect: The property and equipment and other assets are encumbered by a line of credit and could be forfeited if the Organization fails to comply with the terms of the line of credit agreement. Recommendation: The Organization should request permission from the Federal awarding agency prior to encumbering property purchased with Federal funds. Management?s Response: The Organization shall obtain permission from the Federal awarding agency prior to encumbering any property purchased with Federal funds and will attempt to remove the encumbrance of these assets at the time of renewal.

Criteria: In accordance with Public Health Service Act, Part ID, Section 330 each entity which receives a grant under this section shall provide for an independent annual financial audit of any books, accounts, financial records, files, and other papers and property which relate to the disposition or use of the funds received under such grant and such other funds received by or allocated to the project for which such grant was made. Condition: Audits for the years ended April 30, 2015, 2016, and 2017 are delinquent, but in process. Per communication with HRSA the audits for these prior years are program specific. The financial statement and single audit for the year ended April 30, 2020 has not commenced. Cause of Condition: Due to ongoing financial issues within the Organization and issues surrounding engaging the prior auditor in certain time periods of the year, until June 2020, the most recent audit completed was for the year ended April 30, 2014. The audit for the year ended April 30, 2018 was completed and submitted in June 2020. Management has been delinquent in following up in a timely manner in engaging a firm to complete the necessary audit requirements in a timely manner. Effect: The Organization is not being audited on an annual basis and audit submissions are delinquent. Recommendation: The audit should be scheduled to begin no later than two months after year-end to ensure it is completed annually on a timely basis. Management's Response: Management has engaged a firm to complete the delinquent audits in the time frame specified by DHHS. The delinquent audits will commence in order as each of the preceding audits is completed.

Criteria: The Uniform Guidance states that grant recipients shall not encumber property purchased with Federal funds without approval from the Federal awarding agency. Condition: The Organization?s property is encumbered by a line of credit. Cause of Condition: The Organization used property and equipment as well as other assets as collateral to obtain a $125,000 line of credit from a bank without requesting permission from the Federal awarding agency. Effect: The property and equipment and other assets are encumbered by a line of credit and could be forfeited if the Organization fails to comply with the terms of the line of credit agreement. Recommendation: The Organization should request permission from the Federal awarding agency prior to encumbering property purchased with Federal funds. Management's Response: The Organization shall obtain permission from the Federal awarding agency prior to encumbering any property purchased with Federal funds and will attempt to remove the encumbrance of these assets at the time of renewal.

Criteria: The Health Center Program compliance manual states that the majority (at least 51 percent) of the health center board of directors members must be patients served by the health center within the previous 24 months. These health center patient board members must, as a group, represent the individuals who are served by the health center in terms of demographic factors such as race, ethnicity, and gender. Condition: At April 30, 2019, less than 51% of the board of directors? members had been patients of the health center within the previous 24 months. Members of the board of directors were patients before and after the 24 month time period under audit that would have satisfied the requirement, but not for the specific 24 month time period for the year ended April 30, 2019. Cause of Condition: The Organization had not been actively tracking the patient status of all board members and was unable to support over 51% of board members actually seeking services as patients at the health center for the 24 month period requirement. Effect: The Organization is not in compliance with the Health Center Program compliance requirement of at least 51% of board members serving as patients of the health center within the previous 24 months. Recommendation: The Organization should implement further control procedures to ensure that the 51% requirement of board members serving as patients of the health center is met each year and take appropriate action as needed to ensure these steps are followed. Management's Response: The Organization has implemented further control procedures over the tracking process to ensure that the 51% requirement is met on a recurring basis. During the August 2019 HRSA OSV review, it was noted that the Organization was in compliance with the requirements of board composition at that time.

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