EIN: 231858363
UEI: PNLNCXKS1CH6
Audited by: SMITH ELLIOTT KEARNS & COMPANY, LLC
Oversight agency: 93 [Department of Health and Human Services]
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Data as of August 31, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on December 29, 2025. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by June 29, 2026 (64 days ago).
What is a management decision? →Criteria: 2 CFR §200.327 and §200.328 requires recipients of federal awards to submit accurate and timely financial reports as required by the terms and conditions of the award. The Federal Financial Report (FFR) must be submitted by the due date specified in the grant agreement and must reflect accurate financial data. Condition and Context: During our audit of the Community Health Centers Cluster, we noted the entity failed to submit the required FFRs by the established deadlines for two annual reports. Additionally, two submitted reports contained inaccuracies, including expenditures that did not agree to amounts reported on the 2024 Schedule of Expenditures of Federal Awards and/or underlying supporting financial records. In one instance the report was filed 107 days late. In the second instance the report was filed 33 days late. Since this is a repeat finding, this is considered to not be an isolated instance and appears to be more indicative of a systemic problem. Effect: Failure to submit timely and accurate financial reports may result in noncompliance with federal regulations, potential withholding of future funding, and increased risk of questioned costs or audit findings. Cause: The delays and inaccuracies were attributed to inadequate internal controls over the financial reporting process, including lack of review procedures and insufficient training of staff responsible for preparing the reports. Recommendation: We recommend the entity strengthen its internal controls over the financial reporting process by implementing formal review procedures, providing staff training on federal reporting requirements, and establishing a calendar system to ensure timely submissions.
Show full finding ▾Hide full finding ▴Criteria: 2 CFR §200.327 and §200.328 requires recipients of federal awards to submit accurate and timely financial reports as required by the terms and conditions of the award. The Federal Financial Report (FFR) must be submitted by the due date specified in the grant agreement and must reflect accurate financial data. Condition and Context: During our audit of the Community Health Centers Cluster, we noted the entity failed to submit the required FFRs by the established deadlines for two annual reports. Additionally, two submitted reports contained inaccuracies, including expenditures that did not agree to amounts reported on the 2024 Schedule of Expenditures of Federal Awards and/or underlying supporting financial records. In one instance the report was filed 107 days late. In the second instance the report was filed 33 days late. Since this is a repeat finding, this is considered to not be an isolated instance and appears to be more indicative of a systemic problem. Effect: Failure to submit timely and accurate financial reports may result in noncompliance with federal regulations, potential withholding of future funding, and increased risk of questioned costs or audit findings. Cause: The delays and inaccuracies were attributed to inadequate internal controls over the financial reporting process, including lack of review procedures and insufficient training of staff responsible for preparing the reports. Recommendation: We recommend the entity strengthen its internal controls over the financial reporting process by implementing formal review procedures, providing staff training on federal reporting requirements, and establishing a calendar system to ensure timely submissions.
HHC recognizes their responsibility to ensure that all required Federal Reports, including FFRs, are filed on a timely basis. HHC recognizes that during the fiscal year ended 3/31/2025, we were deficient in meeting the timely filing requirement for FFR reports. HHC established a new process in August 2025, whereby the Controller will review the Payment Management System on a bi-weekly basis, but not less frequently than monthly, to identify the deadline for all required Federal Grant reports, including but not limited to FFR reports. The Controller will notify all appropriate individuals of any reports that require attention to meet the reporting deadlines and will be responsible for the timely completion of all such required reporting.
2024-002
Criteria: In accordance with 2 CFR §180 and §200.214, non-federal entities are prohibited from entering into covered transactions with parties that are suspended, debarred, or otherwise excluded from participation in federal programs. Entities must verify that contractors and subcontractors are not excluded by checking the System for Award Management (SAM.gov) prior to awarding contracts funded by federal awards. Condition and Context: During our audit of procurement activities under the Health Center Infrastructure Support federal award, we identified multiple instances where the entity failed to verify the suspension and debarment status of vendors prior to awarding contracts exceeding the $25,000 threshold. Documentation of verification through SAM.gov or equivalent methods was not available for these transactions. Subsequent review of SAM.gov indicated no instances of suspended or debarred vendors being used on the project funded with federal awards. Effect: Failure to verify vendor eligibility increases the risk of awarding federal funds to ineligible parties, which may result in questioned costs, reputational harm, and potential disallowance of expenditures by the federal awarding agency. Cause: While the Center’s formal policies dictate that procedures will be followed to ensure the above criteria are met, staff responsible for procurement were unaware of the verification requirement or did not consistently apply it. Recommendation: We recommend the entity ensure that staff involved with procuring contracts using federal awards are aware of the federal requirement, including the already-established policies that the Center has regarding such requirements. Staff involved in procurement should receive training on federal suspension and debarment requirements to ensure consistent compliance.
Show full finding ▾Hide full finding ▴Criteria: In accordance with 2 CFR §180 and §200.214, non-federal entities are prohibited from entering into covered transactions with parties that are suspended, debarred, or otherwise excluded from participation in federal programs. Entities must verify that contractors and subcontractors are not excluded by checking the System for Award Management (SAM.gov) prior to awarding contracts funded by federal awards. Condition and Context: During our audit of procurement activities under the Health Center Infrastructure Support federal award, we identified multiple instances where the entity failed to verify the suspension and debarment status of vendors prior to awarding contracts exceeding the $25,000 threshold. Documentation of verification through SAM.gov or equivalent methods was not available for these transactions. Subsequent review of SAM.gov indicated no instances of suspended or debarred vendors being used on the project funded with federal awards. Effect: Failure to verify vendor eligibility increases the risk of awarding federal funds to ineligible parties, which may result in questioned costs, reputational harm, and potential disallowance of expenditures by the federal awarding agency. Cause: While the Center’s formal policies dictate that procedures will be followed to ensure the above criteria are met, staff responsible for procurement were unaware of the verification requirement or did not consistently apply it. Recommendation: We recommend the entity ensure that staff involved with procuring contracts using federal awards are aware of the federal requirement, including the already-established policies that the Center has regarding such requirements. Staff involved in procurement should receive training on federal suspension and debarment requirements to ensure consistent compliance.
HHC was in the process of adding a new site in the Steelton area, due to additional need that had been identified for our services. HHC had been the recipient of a Federal Grant- American Rescue Act- Capital Grant and had identified several options for the use of such funds; however, none of those options resulted in a viable use of these funds. It was determined late in the Steelton building project to utilize the American Rescue Act- Capital Grant funds to support this project. Due to the timing and the fact that the General Contractor had already been selected and work had already started on the project, HHC did not proceed with an Exclusion List check to ensure that none of the individuals on the project (contractors and sub-contractors) were not prohibited from being involved in this project. HHC’s Procurement Policy does require review of the Exclusions List for all projects supported by Federal Grant Funds. HHC has reviewed our Procurement Policy and determined that no revisions of the policy are required at this time. HHC has already completed a retroactive review of the Exclusions List of all Contractors and Sub-contractors that were involved in the Steelton Project and found that there were no identified exclusions. This review was completed in September 2025. HHC is committed to future compliance with the review of the Exclusions List for all capital projects whether or not they are supported by Federal Grant funds.
Criteria: This award requires that health centers provide sliding fee discounts for services provided based on the patient’s ability to pay, in accordance with the Center’s sliding fee policy. The patient’s ability to pay is based on the type of services provided, patient’s annual income, and household size, in accordance with the Center’s sliding fee policy. Condition and Context: During our audit of a sample of 40 patients who received sliding fee adjustments, we noted the following: • For 4 of 40 patients tested, the fee charged for the service(s) provided did not agree to the fee schedule. It is further noted that this would not have had any bearing on the correct slide being charged. However, charging an incorrect fee could lead to an incorrect amount being written off as a sliding fee adjustment. • For 1 of 40 patients tested, documentation noted that the patient originally self-declared no income but then was seen for multiple visits thereafter with no income verification. Ultimately no slide was applied and the entire balance was written off. Per the Center’s policy, a patient may only self-declare income once. Future visits should have required income verification to determine the proper discount to apply. • For 1 of 40 patients tested, the income support provided supports a higher annual income than what was calculated on the application. As a result, the patient should not have qualified for a sliding fee discount based on the behavioral health sliding fee scale. While the correct sliding fee discount was charged based on the annual income as noted on the application, the error in annual income calculation did not support the patient being eligible for any sliding fee discount. Effect: While there are no material questioned costs associated with these findings, the effect of the breakdown in internal controls over the sliding fee application process allows for potential noncompliance related to the use of federal funds. Cause: The cause of these findings was due to insufficient review and oversight of the sliding fee application process. Recommendation: We recommend the entity strengthen its internal controls over the sliding fee application and administration process, to include further training of individuals with responsibility for approving sliding fee applications, and enhanced oversight by an independent person to ensure the correct fees are charged for services provided, and the income verification supports the correct sliding fee discount based on the sliding fee scales in effect at time of service. We further recommend enhancements to internal controls to ensure that patients who self-declare no income are providing income verification at subsequent visits.
Show full finding ▾Hide full finding ▴Criteria: This award requires that health centers provide sliding fee discounts for services provided based on the patient’s ability to pay, in accordance with the Center’s sliding fee policy. The patient’s ability to pay is based on the type of services provided, patient’s annual income, and household size, in accordance with the Center’s sliding fee policy. Condition and Context: During our audit of a sample of 40 patients who received sliding fee adjustments, we noted the following: • For 4 of 40 patients tested, the fee charged for the service(s) provided did not agree to the fee schedule. It is further noted that this would not have had any bearing on the correct slide being charged. However, charging an incorrect fee could lead to an incorrect amount being written off as a sliding fee adjustment. • For 1 of 40 patients tested, documentation noted that the patient originally self-declared no income but then was seen for multiple visits thereafter with no income verification. Ultimately no slide was applied and the entire balance was written off. Per the Center’s policy, a patient may only self-declare income once. Future visits should have required income verification to determine the proper discount to apply. • For 1 of 40 patients tested, the income support provided supports a higher annual income than what was calculated on the application. As a result, the patient should not have qualified for a sliding fee discount based on the behavioral health sliding fee scale. While the correct sliding fee discount was charged based on the annual income as noted on the application, the error in annual income calculation did not support the patient being eligible for any sliding fee discount. Effect: While there are no material questioned costs associated with these findings, the effect of the breakdown in internal controls over the sliding fee application process allows for potential noncompliance related to the use of federal funds. Cause: The cause of these findings was due to insufficient review and oversight of the sliding fee application process. Recommendation: We recommend the entity strengthen its internal controls over the sliding fee application and administration process, to include further training of individuals with responsibility for approving sliding fee applications, and enhanced oversight by an independent person to ensure the correct fees are charged for services provided, and the income verification supports the correct sliding fee discount based on the sliding fee scales in effect at time of service. We further recommend enhancements to internal controls to ensure that patients who self-declare no income are providing income verification at subsequent visits.
HHC has reviewed our process for reporting appropriate charges for each CPT code on bills to all third-party payors and found that in isolated cases, the EPIC system was reporting the Sliding Fee Discount Fee on the bill and not the charge from our Fee Schedule for selected CPT codes. HC will collaborate with our EPIC partner- UPMC- to identify why the bills are not appropriately reflecting the CPT code fees from our Fee Schedule instead of the Sliding Fee Discount Fee. HHC has implemented a quarterly internal review process for compliance with all Sliding Fee Discount program requirements. HHC has reviewed our Sliding Fee Discount Policy and determined that there are areas that require revision. There should not be any patients that are given a sliding fee discount based on their self-declaration of income and then continue to receive care without the provision of income verification. HHC is in the process of a total review of our Sliding Fee Discount Policy/Process/Application and will make appropriate adjustments to ensure compliance with the HRSA Sliding Fee Discount Requirements. HHC will replace our One-Time Sliding Fee process with a more compliant approach that will involve: Self-Declaration of Income, whereby the patient will provide us with the income and family size without the required supporting documentation and the appropriate sliding fee will be applied for that visit only, and all future visits will be considered a full fee patient until the patient provides the appropriate support for income and family size; All patients will be requested to provide their income and family size. HHC has implemented a quarterly internal review process for compliance with all Sliding Fee Discount program requirements. HHC has reviewed the claim in question and has no explanation as to why the income reported for a patient was different than the supporting income documents provided by the patient. HHC recognizes that this occurred in only one of forty patient samples. HHC will ensure that all employees that are involved with the Sliding Fee Discount program are re-trained on the importance of accurately reporting the patient’s income based on the supporting documentation provided by the patient. HHC has implemented a quarterly internal review process for compliance with all Sliding Fee Discount program requirements.
FAC accepted this audit on February 4, 2025 — management decision was due August 4, 2025.
2024-002: Significant Deficiency in Internal Control - Reporting Repeat finding of 2023-002 Federal Program: Health Center Program Cluster Assistance Listing Number: 93.224/93.527 Federal Agency: U.S. Department of Health and Human Services Award Number: N/A Award Year: 2024 Compliance Requirement: Reporting Questioned Costs: There are no questioned costs associated with this finding. Criteria: The Organization is required to submit quarterly Federal Cash Transaction Reports within 30 days of the end of each calendar quarter. The Organization also has requirements to submit various reports for performance and special reporting throughout the year. Performance and special reporting deadlines vary by grant, as some require a one time submission, while others may have semi-annual or quarterly reporting requirements. Condition and Context: The Organization was required to submit thirty-five reports during its fiscal year ended March 31, 2024, which comprised six financial reports and twenty-nine performance reports. Two performance reports and three financial reports were not filed timely. Reports that were filed late ranged from being 1 day late up to seventeen days late. The Organization was able to demonstrate its attempt to file 4 of the late reports before their respective due dates however due to login issues on the federal submission site, the reports were not timely filed. The fifth late submission was late by one day. Effect: The Organization did not comply with the reporting requirements for the submission of its performance and financial reports for the fiscal year ending March 31, 2024. Cause: The Organization did not file these reports timely due to an oversight by management. Recommendation: The Organization should implement procedures to identify and ensure compliance with all reporting requirements for each project. Views of Responsible Officials and Planned Correction: The late submission of grant reports was mainly due to login issues when the HRSA changed the process for logging in by adding on a second layer for authentication. A diary system has been developed to alert the CFO and the Controller when grant reports are due. Also, the Controller and Assistant Controller have been given access to both the Payment Management System and the Electronic Handbook (EHB) and have been trained in federal grant reporting so that in the absence of one the others can prepare the reports and submit on time.
Show full finding ▾Hide full finding ▴2024-002: Significant Deficiency in Internal Control - Reporting Repeat finding of 2023-002 Federal Program: Health Center Program Cluster Assistance Listing Number: 93.224/93.527 Federal Agency: U.S. Department of Health and Human Services Award Number: N/A Award Year: 2024 Compliance Requirement: Reporting Questioned Costs: There are no questioned costs associated with this finding. Criteria: The Organization is required to submit quarterly Federal Cash Transaction Reports within 30 days of the end of each calendar quarter. The Organization also has requirements to submit various reports for performance and special reporting throughout the year. Performance and special reporting deadlines vary by grant, as some require a one time submission, while others may have semi-annual or quarterly reporting requirements. Condition and Context: The Organization was required to submit thirty-five reports during its fiscal year ended March 31, 2024, which comprised six financial reports and twenty-nine performance reports. Two performance reports and three financial reports were not filed timely. Reports that were filed late ranged from being 1 day late up to seventeen days late. The Organization was able to demonstrate its attempt to file 4 of the late reports before their respective due dates however due to login issues on the federal submission site, the reports were not timely filed. The fifth late submission was late by one day. Effect: The Organization did not comply with the reporting requirements for the submission of its performance and financial reports for the fiscal year ending March 31, 2024. Cause: The Organization did not file these reports timely due to an oversight by management. Recommendation: The Organization should implement procedures to identify and ensure compliance with all reporting requirements for each project. Views of Responsible Officials and Planned Correction: The late submission of grant reports was mainly due to login issues when the HRSA changed the process for logging in by adding on a second layer for authentication. A diary system has been developed to alert the CFO and the Controller when grant reports are due. Also, the Controller and Assistant Controller have been given access to both the Payment Management System and the Electronic Handbook (EHB) and have been trained in federal grant reporting so that in the absence of one the others can prepare the reports and submit on time.
Condition The Organization was required to submit thirty-five reports during its fiscal year ended March 31, 2024, which comprised six financial reports and twenty-nine performance reports. Two performance reports and three financial reports were not filed timely. Reports that were filed late ranged from being 1 day late up to seventeen days late. The Organization was able to demonstrate its attempt to file 4 of the late reports before their respective due dates however due to login issues on the federal submission site, the reports were not timely filed. The fifth late submission was late by one day. Corrective Action Plan Corrective Action Planned: The late submission of some grant reports was mainly due to login issues when the HRSA changed the process for logging in by adding on a second layer for authentication. A diary system has been developed to alert the CFO and the Controller when grant reports are due. Also, the Controller and Assistant Controller have been given access to both the Payment Management System and the Electronic Handbook (EHB) and have been trained in federal grant reporting so that in the absence of one the others can prepare the reports and submit in time. Name(s) of Contact Person(s) Responsible for Corrective Action: Frackson Sakala, CFO; Joseph McLaughlin, Controller; and Tran Le, the Assistant Controller Anticipated Completion Date: This has been started and is expected to be completed by January 31, 2025.
2023-002
2024-003: Significant Deficiency in Internal Control - Indirect Costs Repeat Finding of 2023-003 Federal Program: COVID-19: Community Health Centers (Health Center Program Cluster) Assistance Listing Number: 93.224/93.527 Federal Agency: U.S. Department of Health and Human Services Award Number: N/A Award Year: 2024 Compliance Requirement: Allowable Costs/Cost Principles Questioned Costs: $6,054 Criteria: The Organization has a negotiated indirect cost rate agreement with the federal government for indirect costs. In accordance with 2 CFR Part 200, Appendix IV, indirect cost rate proposals are used to establish predetermined rates, fixed rates with carry-forward provision, provisional or final rates. A provision rate or billing rate is a temporary indirect cost rate applicable to a specified period which is used for funding, interim reimbursement and reporting of indirect costs pending establishment of a final rate for the period. An organization cannot charge indirect costs to a federal program in excess of its negotiated indirect cost rate agreement. Condition and Context: The Organization's negotiated indirect cost rate agreement includes a provisional rate of 17.75% of direct costs for the period April 1, 2021 through March 21, 2024. The Organization charged indirect costs to its American Rescue Plan supplemental health center funding using a rate of 18.8% of direct costs for the period April 2023 through June 2023. The 18.8% rate that was used was obtained from an expired indirect cost rate agreement. Effect: The Organization charged indirect costs of $6,054 in excess of what was allowed during the year ended March 31, 2024. Cause: The Organization used the incorrect indirect cost rate due to oversight by management. Recommendation: The Organization should implement procedures to ensure indirect costs are being charged to programs using the most recent indirect cost rate agreement in place. Views of Responsible Officials and Planned Correction: The continued use of the expired indirecto cost rate was caused by the departure of the former CFO, who was responsible for reviewing federal grant draw downs. After the CFO let, the controller continued using the expired indirect cost rate. The new CFO has put in place a system to review the indirect cost rate in effect prior to the drawdown of grant funds.
Show full finding ▾Hide full finding ▴2024-003: Significant Deficiency in Internal Control - Indirect Costs Repeat Finding of 2023-003 Federal Program: COVID-19: Community Health Centers (Health Center Program Cluster) Assistance Listing Number: 93.224/93.527 Federal Agency: U.S. Department of Health and Human Services Award Number: N/A Award Year: 2024 Compliance Requirement: Allowable Costs/Cost Principles Questioned Costs: $6,054 Criteria: The Organization has a negotiated indirect cost rate agreement with the federal government for indirect costs. In accordance with 2 CFR Part 200, Appendix IV, indirect cost rate proposals are used to establish predetermined rates, fixed rates with carry-forward provision, provisional or final rates. A provision rate or billing rate is a temporary indirect cost rate applicable to a specified period which is used for funding, interim reimbursement and reporting of indirect costs pending establishment of a final rate for the period. An organization cannot charge indirect costs to a federal program in excess of its negotiated indirect cost rate agreement. Condition and Context: The Organization's negotiated indirect cost rate agreement includes a provisional rate of 17.75% of direct costs for the period April 1, 2021 through March 21, 2024. The Organization charged indirect costs to its American Rescue Plan supplemental health center funding using a rate of 18.8% of direct costs for the period April 2023 through June 2023. The 18.8% rate that was used was obtained from an expired indirect cost rate agreement. Effect: The Organization charged indirect costs of $6,054 in excess of what was allowed during the year ended March 31, 2024. Cause: The Organization used the incorrect indirect cost rate due to oversight by management. Recommendation: The Organization should implement procedures to ensure indirect costs are being charged to programs using the most recent indirect cost rate agreement in place. Views of Responsible Officials and Planned Correction: The continued use of the expired indirecto cost rate was caused by the departure of the former CFO, who was responsible for reviewing federal grant draw downs. After the CFO let, the controller continued using the expired indirect cost rate. The new CFO has put in place a system to review the indirect cost rate in effect prior to the drawdown of grant funds.
Condition The Organization's negotiated indirect cost rate agreement includes a provisional rate of 17.75% of direct costs for the period April 1, 2021 through March 21, 2024. The Organization charged indirect costs to its American Rescue Plan supplemental health center funding using a rate of 18.8% of direct costs for the period April 2023 through June 2023. The 18.8% rate that was used was obtained from an expired indirect cost rate agreement. Corrective Action Plan Corrective Action Planned: The continued use of the expired indirect cost rate was caused by the departure of the CFO who was responsible for reviewing federal grant draw downs. After the CFO left, the controller continued using the expired indirect cost rate but now the new CFO has put in place a system of review the indirect cost rate in effect against all reports before drawing down the grant. Name(s) of Contact Person(s) Responsible for Corrective Action: Frackson Sakala, CFO; Joseph McLaughlin, Controller; and Tran Le, the Assistant Controller. Anticipated Completion Date: This was immediately effected when this error was discovered during the FY2024 audit.
2023-003
FAC accepted this audit on December 26, 2023 — management decision was due June 26, 2024.
Federal Program: Health Centers Program Cluster Assistance Listing Number: 93.224/93.527 Federal Agency: U.S. Department of Health and Human Services Award Number: N/A Award Year: 2023 Compliance Requirement: Reporting Questioned Costs: There are no questioned costs associated with this finding. Criteria: The Organization is required to submit quarterly Federal Cash Transaction Reports within 30 days of the end of each calendar quarter. The Organization also has requirements to submit various reports for performance and special reporting throughout the year. Performance and special reporting deadlines vary by grant, as some require a one time submission, while others may have semi-annual or quarterly reporting requirements. Condition and Context: The Organization was required to submit twenty-five reports during its fiscal year ended March 31, 2023, which comprised four financial reports and twenty-one performance reports. Eight of the performance reports were not filed timely. Furthermore, two of the eight late filings were not submitted yet as of the end of the fiscal year. This is a late submission rate of 32% overall, and 38% on performance reports only. Reports that were filed late ranged from being four days late up to fifty-one days late. Effect: The Organization did not comply with the reporting requirements for the submission of its performance reports for the fiscal year ending March 31, 2023. Cause: The Organization did not file these reports timely due to an oversight by management and turnover within the accounting department during the fiscal year. Recommendation: The Organization should implement procedures to identify and ensure compliance with all reporting requirements for each project. Views of Responsible Officials and Planned Correction: In September of 2022, the Chief Financial Officer left the health center, and a replacement was not hired until February 20, 2023, a month before the end of the fiscal year on March 31, 2023. While the accounting staff have been with the health center for more than three years, they lacked guidance while the search for a replacement Chief Financial Officer was going on. The accounting staff were not trained in HRSA grant reporting and this led to missing the grant reporting due dates. The new Chief Financial Officer is experienced in HRSA grants reporting and has put in place a tracking system for all grants including HRSA Federal grants so that lapses in grants reporting do not happen again. This finding has since been resolved and there will never be a reoccurrence in future.
Show full finding ▾Hide full finding ▴Federal Program: Health Centers Program Cluster Assistance Listing Number: 93.224/93.527 Federal Agency: U.S. Department of Health and Human Services Award Number: N/A Award Year: 2023 Compliance Requirement: Reporting Questioned Costs: There are no questioned costs associated with this finding. Criteria: The Organization is required to submit quarterly Federal Cash Transaction Reports within 30 days of the end of each calendar quarter. The Organization also has requirements to submit various reports for performance and special reporting throughout the year. Performance and special reporting deadlines vary by grant, as some require a one time submission, while others may have semi-annual or quarterly reporting requirements. Condition and Context: The Organization was required to submit twenty-five reports during its fiscal year ended March 31, 2023, which comprised four financial reports and twenty-one performance reports. Eight of the performance reports were not filed timely. Furthermore, two of the eight late filings were not submitted yet as of the end of the fiscal year. This is a late submission rate of 32% overall, and 38% on performance reports only. Reports that were filed late ranged from being four days late up to fifty-one days late. Effect: The Organization did not comply with the reporting requirements for the submission of its performance reports for the fiscal year ending March 31, 2023. Cause: The Organization did not file these reports timely due to an oversight by management and turnover within the accounting department during the fiscal year. Recommendation: The Organization should implement procedures to identify and ensure compliance with all reporting requirements for each project. Views of Responsible Officials and Planned Correction: In September of 2022, the Chief Financial Officer left the health center, and a replacement was not hired until February 20, 2023, a month before the end of the fiscal year on March 31, 2023. While the accounting staff have been with the health center for more than three years, they lacked guidance while the search for a replacement Chief Financial Officer was going on. The accounting staff were not trained in HRSA grant reporting and this led to missing the grant reporting due dates. The new Chief Financial Officer is experienced in HRSA grants reporting and has put in place a tracking system for all grants including HRSA Federal grants so that lapses in grants reporting do not happen again. This finding has since been resolved and there will never be a reoccurrence in future.
Corrective Action Planned: In September of 2022, the Chief Financial Officer left the health center, and a replacement was not hired until a month (February 20, 2023) before the end of the fiscal year on March 31, 2023. While the accounting staff have been with the health center for more than three years, they lacked guidance while the search for a replacement Chief Financial Officer was going on. The accounting staff were not trained in HRSA grant reporting and this led to missing the grant reporting due dates. The new Chief Financial Officer is experienced in HRSA grants reporting and has put in place a tracking system for all grants including HRSA Federal grants so that lapses in grants reporting do not happen again. Name(s) of Contact Person(s) Responsible for Corrective Action: Frackson Sakala Anticipated Completion Date: 12/31/2023
2022-001
Federal Program: Health Centers Program Cluster Assistance Listing Number: 93.224/93.527 Federal Agency: U.S. Department of Health and Human Services Award Number: N/A Award Year: 2023 Compliance Requirement: Allowable Costs/Cost Principles Questioned Costs: $13,486 Criteria: The Organization has a negotiated indirect cost rate agreement with the federal government for indirect costs. In accordance with 2 CFR Part 200, Appendix IV, indirect cost rate proposals are used to establish predetermined rates, fixed rates with carry-forward provision, provisional or final rates. A provision rate or billing rate is a temporary indirect cost rate applicable to a specified period which is used for funding, interim reimbursement and reporting of indirect costs pending establishment of a final rate for the period. An organization cannot charge indirect costs to a federal program in excess of its negotiated indirect cost rate agreement. Condition and Context: The Organization's negotiated indirect cost rate agreement includes a provisional rate of 17.75% of direct costs for the period April 1, 2021 through March 21, 2024. The Organization charged indirect costs to its American Rescue Plan supplemental health center funding using a rate of 18.8% of direct costs for the period June 2022 through March 2023. The 18.8% rate that was used was obtained from an expired indirect cost rate agreement. Effect: The Organization charged indirect costs of $13,486 in excess of what was allowed during the year ended March 31, 2023. Cause: The Organization used the incorrect indirect cost rate due to oversight by management. Recommendation: The Organization should implement procedures to ensure indirect costs are being charged to programs using the most recent indirect cost rate agreement in place. Views of Responsible Officials and Planned Correction: In September of 2022, the Chief Financial Officer left the health center, and a replacement was not hired until February 20, 2023, a month before the end of the fiscal year on March 31, 2023. While the accounting staff have been with the health center for more than three years, they lacked guidance while the search for a replacement Chief Financial Officer was going on. The Chief Financial Officer who left the health center was the only one who was handling and administering the indirect cost rate to Federal grants but when he left the accounting staff had no clue that the new indirect cost rate needed to be administered. The new Chief Financial Officer has experience in the use and application of indirect cost rates and has cross trained the Controller in the use and application of indirect cost rates. This finding will never reoccur in future.
Show full finding ▾Hide full finding ▴Federal Program: Health Centers Program Cluster Assistance Listing Number: 93.224/93.527 Federal Agency: U.S. Department of Health and Human Services Award Number: N/A Award Year: 2023 Compliance Requirement: Allowable Costs/Cost Principles Questioned Costs: $13,486 Criteria: The Organization has a negotiated indirect cost rate agreement with the federal government for indirect costs. In accordance with 2 CFR Part 200, Appendix IV, indirect cost rate proposals are used to establish predetermined rates, fixed rates with carry-forward provision, provisional or final rates. A provision rate or billing rate is a temporary indirect cost rate applicable to a specified period which is used for funding, interim reimbursement and reporting of indirect costs pending establishment of a final rate for the period. An organization cannot charge indirect costs to a federal program in excess of its negotiated indirect cost rate agreement. Condition and Context: The Organization's negotiated indirect cost rate agreement includes a provisional rate of 17.75% of direct costs for the period April 1, 2021 through March 21, 2024. The Organization charged indirect costs to its American Rescue Plan supplemental health center funding using a rate of 18.8% of direct costs for the period June 2022 through March 2023. The 18.8% rate that was used was obtained from an expired indirect cost rate agreement. Effect: The Organization charged indirect costs of $13,486 in excess of what was allowed during the year ended March 31, 2023. Cause: The Organization used the incorrect indirect cost rate due to oversight by management. Recommendation: The Organization should implement procedures to ensure indirect costs are being charged to programs using the most recent indirect cost rate agreement in place. Views of Responsible Officials and Planned Correction: In September of 2022, the Chief Financial Officer left the health center, and a replacement was not hired until February 20, 2023, a month before the end of the fiscal year on March 31, 2023. While the accounting staff have been with the health center for more than three years, they lacked guidance while the search for a replacement Chief Financial Officer was going on. The Chief Financial Officer who left the health center was the only one who was handling and administering the indirect cost rate to Federal grants but when he left the accounting staff had no clue that the new indirect cost rate needed to be administered. The new Chief Financial Officer has experience in the use and application of indirect cost rates and has cross trained the Controller in the use and application of indirect cost rates. This finding will never reoccur in future.
Corrective Action Planned: In September of 2022, the Chief Financial Officer left the health center, and a replacement was not hired until a month (February 20, 2023) before the end of the fiscal year on March 31, 2023. While the accounting staff have been with the health center for more than three years, they lacked guidance while the search for a replacement Chief Financial Officer was going on. The Chief Financial Officer who left the health center was the only one who was handling and administering the indirect cost rate to Federal grants but when he left the accounting staff had no clue that the new indirect cost rate needed to be administered. The new Chief Financial Officer has experience in the use and application of indirect cost rates and has cross trained the Controller in the use and application of indirect cost rates. This finding will never reoccur in future. Name(s) of Contact Person(s) Responsible for Corrective Action: Frackson Sakala Anticipated Completion Date: 12/31/2023
FAC accepted this audit on December 11, 2022 — management decision was due June 11, 2023.
2022-001: Significant Deficiency in Internal Control - Reporting Federal Program: Health Centers Program Cluster Assistance Listing Number: 93.224/93.527 Federal Agency: U.S. Department of Health and Human Services Award Number: N/A Award Year: 2022 Compliance Requirement: Reporting Questioned Costs: There are no questioned costs associated with this finding. Criteria: The Corporation is required to submit quarterly Federal Cash Transaction Reports within 30 days of the end of each calendar quarter. Condition and Context: The Corporation was required to submit its quarterly Federal Cash Transaction Report for the quarter ended December 31, 2021 by January 30, 2022 and the report was submitted on March 1, 2022. Effect: The Corporation did not comply with the reporting requirements for the submission of the quarterly Federal Cash Transaction Report for the period ended December 31, 2021. Cause: The Corporation did not file the quarterly Federal Cash Transaction Report timely due to an oversight by management. Recommendation: The Corporation should implement procedures to identify and ensure compliance with all reporting requirements for each project.
Show full finding ▾Hide full finding ▴2022-001: Significant Deficiency in Internal Control - Reporting Federal Program: Health Centers Program Cluster Assistance Listing Number: 93.224/93.527 Federal Agency: U.S. Department of Health and Human Services Award Number: N/A Award Year: 2022 Compliance Requirement: Reporting Questioned Costs: There are no questioned costs associated with this finding. Criteria: The Corporation is required to submit quarterly Federal Cash Transaction Reports within 30 days of the end of each calendar quarter. Condition and Context: The Corporation was required to submit its quarterly Federal Cash Transaction Report for the quarter ended December 31, 2021 by January 30, 2022 and the report was submitted on March 1, 2022. Effect: The Corporation did not comply with the reporting requirements for the submission of the quarterly Federal Cash Transaction Report for the period ended December 31, 2021. Cause: The Corporation did not file the quarterly Federal Cash Transaction Report timely due to an oversight by management. Recommendation: The Corporation should implement procedures to identify and ensure compliance with all reporting requirements for each project.
Upon discovery of the missed filing deadline, the filing was completed by management. Hamilton will set quarterly reminders of these due dates and check to see if reports are due prior to each draw down done on the Payment Management System.
2022-002: Significant Deficiency in Internal Control - Reporting Federal Program: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Program Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Award Number: N/A Award Year: 2021 Compliance Requirement: Reporting Questioned Costs: Not determinable Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Recipients of Provider Relief Funds (PRF) payments must also comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services. Condition and Context: The Corporation did not complete the PRF reporting in accordance with the U.S. Department of Health and Human Services guidance. The Corporation incorrectly used gross patient revenue from reports under incorrect parameters. Such amounts were used in the calculation of lost revenues. The adjustments needed within the PRF report to correct the errors decreased year over year lost revenues from $9,417,623 to $7,949,685 on total distributions of PRF funding of $270,468. Effect: The amounts reported to Health Resources & Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance. Cause: An oversight by management led to the incorrect reports being used to calculate lost revenue on the PRF Phase 1 submission. Recommendation: We recommend that management implement procedures to ensure that the most recent guidance is reviewed and understood, and that information used in preparation of the reports is reviewed, with errors addressed, prior to reporting.
Show full finding ▾Hide full finding ▴2022-002: Significant Deficiency in Internal Control - Reporting Federal Program: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Program Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Award Number: N/A Award Year: 2021 Compliance Requirement: Reporting Questioned Costs: Not determinable Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Recipients of Provider Relief Funds (PRF) payments must also comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services. Condition and Context: The Corporation did not complete the PRF reporting in accordance with the U.S. Department of Health and Human Services guidance. The Corporation incorrectly used gross patient revenue from reports under incorrect parameters. Such amounts were used in the calculation of lost revenues. The adjustments needed within the PRF report to correct the errors decreased year over year lost revenues from $9,417,623 to $7,949,685 on total distributions of PRF funding of $270,468. Effect: The amounts reported to Health Resources & Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance. Cause: An oversight by management led to the incorrect reports being used to calculate lost revenue on the PRF Phase 1 submission. Recommendation: We recommend that management implement procedures to ensure that the most recent guidance is reviewed and understood, and that information used in preparation of the reports is reviewed, with errors addressed, prior to reporting.
Management concurs with the finding. Management will ensure that net, not gross revenues will be utilized in the calculation of lost revenues. On a monthly basis, net revenues will be calculated from internal reports and tied to the general ledger. This will ensure that such reporting not only ties to the general ledger, but complies with the established U.S. Department of Health and Human Services reporting guidance, which will be reviewed by management.
FAC accepted this audit on January 3, 2022 — management decision was due July 3, 2022.
FAC accepted this audit on March 25, 2021 — management decision was due September 25, 2021.
FAC accepted this audit on September 22, 2019 — management decision was due March 22, 2020.
FAC accepted this audit on September 20, 2018 — management decision was due March 20, 2019.
FAC accepted this audit on September 28, 2017 — management decision was due March 28, 2018.
GSA_MIGRATION
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GSA_MIGRATION
2016-001
FAC accepted this audit on October 13, 2016 — management decision was due April 13, 2017.
GSA_MIGRATION
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