West Side Community Health Services, Inc.Non-Profit

2023 – 006 Federal agency: U.S. Department of Health and Human Services Federal program title: Health Centers Cluster Assistance Listing Numbers: 93.224/93.527 Award Period: Varying project and budget periods: 2/1/22 – 1/31/23, 2/1/23 – 1/31/24, 4/1/21 – 3/31/23, 12/1/22 – 12/31/23 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per Title 42 Chapter 1 Subchapter D Section 51C303(f) and (g), health centers must have a schedule of fees or payments for the provision of their health services consistent with locally prevailing rates or charges and designed to cover their reasonable costs of operations. They are also required to have a corresponding schedule of discounts applied and adjusted on the basis of the patient's ability to pay. Condition: During our audit testing surrounding the sliding fee discount policy, we noted two instances where an error was made in the sliding fee determination, or insufficient documentation was retained to support adjustment calculation. Questioned costs: None. Context: 1 out of 25 sliding fee adjustments tested was not calculated properly in accordance with the Organization's policy. For this individual the sliding fee adjustment category was determined incorrectly, and a larger adjustment was provided than what the correct determination would have provided. For 1 out of 25 sliding fee adjustments tested, the sliding fee application was not able to be provided, so there was not sufficient documentation to support the sliding fee determination. Cause: Manual errors and insufficient review or oversight in the sliding fee adjustment calculation process. Effect: A patient paid the incorrect amount for an encounter as the sliding fee adjustment had been calculated incorrectly. For another patient encounter, the Organization is not able to provide sufficient supporting organization for the sliding fee adjustment determined. No specific instances of noncompliance with the grant requirements were identified, although there were instances of noncompliance with the Organization's own policies. The lack of internal controls over these compliance requirements, however, creates a risk for noncompliance. Recommendation: We recommend the organization have a review process over determinations to ensure accuracy and provide training as needed to mitigate risk of future errors. We also recommend reviewing procedures in place for retaining documentation for sliding fee applications to ensure sufficient detail is retained according to policy. View of responsible officials: No disagreement with the finding. Management will review sliding fee policies and procedures in place to improve oversight and provide training to the team members conducting the patient intake and reviewing sliding fee applications.

2023 – 007 Federal agency: U.S. Department of Health and Human Services Federal program title: Health Centers Cluster Assistance Listing Numbers: 93.224/93.527 Award Period: Varying project and budget periods: 2/1/22 – 1/31/23, 2/1/23 – 1/31/24, 4/1/21 – 3/31/23 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: In our audit testing around payroll expenditures, the Organization was not able to provide supporting documentation of the internal control process occurring where supervisors review and approve employee timesheets with each payroll. Questioned costs: None. Context: The Organization changed its payroll system during the year, and historic timesheet data, including documentation of approval on timesheets, was not retained in the transition. Therefore in our testing of 38 payroll transactions, we were able to get support for the underlying expenses to support an eligible grant expenditure, but not able to obtain support of the internal control occurring of supervisor approval of time. Cause: Payroll system transition resulted in loss of historic documentation on time sheets and supervisor approval. Effect: Without retained documentation, the Organization is not able to support the existence of internal controls in place. Recommendation: We recommend in the future the Organization retain documentation of key control processes occurring for a reasonable retention period to be able to support control activities around grant compliance and financial reporting. View of responsible officials: No disagreement with the finding. Management will retain timesheet documentation moving forward to support control process in place.

2023 – 008 Federal agency: U.S. Department of Health and Human Services Federal program title: Health Centers Cluster Assistance Listing Numbers: 93.224/93.527 Award Period: Varying project and budget periods: 2/1/22 – 1/31/23, 2/1/23 – 1/31/24, 4/1/21 – 3/31/23 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Organization did not have sufficient internal control process or review in place over required reporting for federal programs. There was no documentation retained of review occurring before submission of reports. Errors were identified in key line items tested in the UDS report filed for 2022 during the fiscal year 2023. Questioned costs: None. Context: While the Organization has historically had a review process over required federal program reporting, there was no documentation of that review occurring for the reports tested, including FFR reports and UDS report for the community health center grants. For the UDS report, due to an error in supporting schedules, amounts reported in Table 9E, lines 1g and 1q were overstated. There was turnover in key finance positions at the Organization, where historical segregation of duties between preparer and reviewer was not always possible. Cause: Turnover in personnel at the Organization likely led to lapses in review processes that had been in place historically. The lack of detailed review likely resulted in the errors identified in UDS reporting. Effect: Without sufficient review processes in place, there is greater risk of noncompliance or errors in required reporting under federal programs. In the case of the UDS reporting, certain line items were misreported due to errors in supporting spreadsheets. Repeat Finding: The finding is a repeat of finding in the immediately prior year. Prior year finding number was 2022-006. Recommendation: We recommend implementing a formal policy and procedure where there is a review of all required reporting by an individual that did not prepare the report. Documentation should be retained to support the review/approval occurrence. View of responsible officials: No disagreement with the finding. Management will implement a formal review process for reporting and retain documentation of review. This has been incorporated in subsequent reporting years.

Federal agency: U.S. Department of Health and Human Services Federal program title: Health Centers Cluster Assistance Listing Numbers: 93.224/93.527 Award Period: Varying project and budget periods: 2/1/21 – 1/31/22, 2/1/22 – 1/31/23, 4/1/21 – 3/31/23 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Organization did not have sufficient internal control processes or review in place to identify errors in grant expenditure tracking spreadsheets, resulting in summarized expenditures that exceeded the total of the underlying detailed expenditures for H8F grant. Grant draws and revenue recognition utilized the summarized expenditures. There was also no documentation of review and approval process occurring related to drawdowns tested in the audit procedures. Questioned costs: None. Context: The Organization's detailed expenditures initially were not sufficient to support the full amount of the grant funds drawn down and recognized as revenue on the H8F grant. There was, however, more than sufficient eligible expenditures when additional indirect costs under an approved indirect cost rate were considered. The Health Center does have a review process in place around federal grant drawdowns, however formal documentation was not maintained to support that review process occurring. Cause: There were insufficient reconciliation procedures in place between the detailed expenditures identified to the grant and the summary schedules used for drawing down federal funds and required reporting. Effect: Had there not been sufficient eligible indirect costs to make up for the deficit between detailed expenditures and grant draws, grant draws would have exceeded the related eligible expenditures, and revenue recorded per the general ledger and SEFA would have been overstated. Without detailed review and approval process, there is greater risk of future errors. Recommendation: We recommend reviewing reconciliation procedures between detailed grant expenditures and summary schedules used in reporting/draw down requests to ensure sufficient detail to support draw downs. Also recommend a detailed review and approval process for federal grant eligible expenditures and draw downs, to identify issues prior to draw down or reporting in the future. Documentation should be retained to support review/approval occurrence. View of responsible officials: No disagreement with the finding. Management will review and improve reconciliation and review process around eligible expenditures for federal grants, and drawdowns of federal funds.

Federal agency: U.S. Department of Health and Human Services Federal program titles: Health Centers Cluster, Provider Relief Fund Assistance Listing Numbers: 93.224/93.527, 93.498 Award Period: Varying project and budget periods: 2/1/21 – 1/31/22, 2/1/22 – 1/31/23, 4/1/21 – 3/31/23, PRF Reporting Period 2 for funds received 7/1/20 – 12/31/20 and used through 12/31/21 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Organization did not have sufficient internal control process or review in place over required reporting for federal programs. There was no documentation retained of review occurring before submission of reports. Errors were identified in key line items tested in the UDS report filed for 2021 during the fiscal year 2022. Questioned costs: None. Context: While the Organization has historically had a review process over required federal program reporting, there was no documentation of that review occurring for the reports tested, including FFR reports and UDS report for the community Organization grants, and the required reporting for Provider Relief Funds. For the UDS report, due to an error in supporting schedules, amounts reported in Table 9E, lines 1g and 1q were overstated. There was turnover in key finance positions at the Organization, where historical segregation of duties between preparer and reviewer was not always possible. Cause: Turnover in personnel at the Organization likely led to lapses in review processes that had been in place historically. The lack of detailed review likely resulted in the errors identified in UDS reporting. The Provider Relief Fund grant was also a newer program with unique reporting requirements the Organization had not previously experienced. Effect: Without sufficient review processes in place, there is greater risk of noncompliance or errors in required reporting under federal programs. In the case of the UDS reporting, certain line items were misreported due to errors in supporting spreadsheets. Recommendation: We recommend implementing a formal policy and procedure where there is a review of all required reporting by an individual that did not prepare the report. Documentation should be retained to support the review/approval occurrence. View of responsible officials: No disagreement with the finding. Management will implement a formal review process for reporting and retain documentation of review.

Federal agency: U.S. Department of Health and Human Services Federal program title: Health Centers Cluster Assistance Listing Number: 93.224/93.527 Award Period: Varying project and budget periods: 2/1/21 – 1/31/22, 2/1/22 – 1/31/23, 4/1/21 – 3/31/23 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Cost principles under 2 CFR 200 also do not allow expenditures for individual's wages that exceed a federal compensation limit. Condition: One individual's compensation charged to the federal grant had wages that exceeded federal compensation limits. Questioned costs: $24,920 of wage-related costs exceeding federal limitation. Context: While there was one individual with compensation exceeding federal limits charged to the Organization H8F grant, there were other eligible wage and other expenditures available that could have replaced the overage had it been corrected. Cause: Internal control procedures were not sufficient to identify the wages exceeding federal limits prior to being charged to the federal grant. Effect: Eligible wage expenditures were overstated due to wages that exceed federal limits for one individual. There were other available eligible expenditures sufficient to offset this overstatement, however. Recommendation: We recommend management implement a review process to check individual's compensation charged to federal grants against annual federal limitations prior to drawdown of funds. View of responsible officials: No disagreement with the finding. Management will implement review processes to identify individuals over federal wage limitations moving forward before being charged to federal grants.

Federal agency: U.S. Department of Health and Human Services Federal program title: Health Centers Cluster Assistance Listing Number: 93.224/93.527 Award Period: Varying project and budget periods: 2/1/21 – 1/31/22, 2/1/22 – 1/31/23, 4/1/21 – 3/31/23 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Code of Federal Regulations section 200.320 states the non-Federal entity must have and use documented procurement procedures following specific requirements for different methods of procurement depending on size and type of purchase. Thresholds for these categories (micro-purchase, simplified acquisition threshold) refer to using the Federal Acquisition Regulations (FAR), unless a different threshold has been specifically approved. Specifically, under FAR multiple quotes are generally required for purchases over the micro-purchase threshold, or documentation should be maintained explaining why multiple quotes were not obtained. Condition: During our testing, we noted the Organization had a proper procurement policy that met the federal requirements, but was not able to provide documentation supporting the policy was followed for all vendors selected. Questioned costs: None. Context: In our testing covering three vendors, two of the three the Organization was not able to provide documentation supporting the use of noncompetitive procurement. Based on understanding of the vendors and why they were selected, the vendors used appear reasonable, but there is insufficient documentation to support the Organization's policy was followed. Cause: Turnover in personnel at the Organization likely played a role, but the Organization was also focused on response to the COVID-19 pandemic at the time of vendor procurement. So timeliness was often most important in procuring vendors and related products/services. Effect: Without retaining documentation to support proper compliance with the Organization's policy, there is greater risk of noncompliance or inappropriate vendor selection. Recommendation: We recommend the Organization follow existing policy, but ensure procedures are in place to retain sufficient documentation to support whichever procurement method was utilized in procuring vendors. View of responsible officials: No disagreement with the finding. Management will review procedures to ensure proper procurement methodology is utilized under the Organization's policy, and that sufficient documentation is retained to support procurement method.

Federal agency: U.S. Department of Health and Human Services Federal program title: Health Centers Cluster Assistance Listing Number: 93.224/93.527 Award Period: Varying project and budget periods: 2/1/21 – 1/31/22, 2/1/22 – 1/31/23, 4/1/21 – 3/31/23 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Code of Federal Regulations section 200.214 requires the Center to follow the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The Organization should have policies and procedures in place to ensure contracts or subaward are not provided to third parties that are suspended or disbarred. Condition: During our testing, we noted the Organization had a proper policy around suspension and debarment, but was not able to provide documentation supporting the policy was followed for all vendors selected. Questioned costs: None. Context: In our testing covering three vendors, the Organization was not able to provide documentation supporting the Organization had followed its suspension and debarment policy. All vendors were checked against the exclusion list at the time of audit testing, and none were found to be suspended/debarred. Cause: Turnover in personnel at the Organization likely played a role, but the Organization was also focused on response to the COVID-19 pandemic at the time of vendor procurement. So timeliness was often most important in procuring vendors and related products/services. Effect: Without retaining documentation to support proper compliance with the Organization's policy, there is greater risk of noncompliance or inappropriate vendor selection. Recommendation: We recommend the Organization follow existing policy, but ensure procedures are in place to retain sufficient documentation to support review of vendors against federal exclusion list. View of responsible officials: No disagreement with the finding. Management will review procedures to ensure proper check of vendors is performed against federal exclusion list, and that documentation is maintained to support that review.

2021 ? 002 Federal agency: U.S. Department of Agriculture Federal program title: Child Nutrition Cluster (Summer Food Service Program) CFDA Number: 10.559 Award Period: October 1, 2020 to September 30, 2021 Type of Finding: - Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Code of Federal Regulations section 200.214 requires the Organization to follow the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The Organization should have policies and procedures in place to ensure contracts or subaward are not provided to third parties that are suspended or debarred. Condition: During our testing, we noted the Organization did not have formal policies or procedures in place to determine if vendors have been suspended or debarred prior to entering into a contract. Questioned costs: None. Context: During our testing, a sample of one disbursement transaction greater than $25,000 was selected for suspension and debarment testing. The Organization did not have a process to check the ?System for Award Management (SAM) Exclusions? or other procedures to ensure third parties were not suspended or debarred, or retain related support. The vendor selected was compared to the SAM Exclusions at the time of testing, and it was not noted to be suspended or debarred, although the testing could not be performed back to the date of the transactions. Cause: The Organization does not have a formal suspension and debarment policy in place that meets Uniform Guidance requirements. Effect: The lack of a formal suspension and debarment policy provides the opportunity for noncompliance due to transactions with suspended or debarred parties. Recommendation: We recommend the Organization create and implement a suspension and debarment policy that meets the requirements of federal regulations. View of responsible officials: Management will develop and implement a suspension and debarment policy to meet Uniform Guidance requirements, and ensure procedures are revised to follow the updated policy.

2021 ? 003 Federal agency: U.S. Department of Homeland Security Federal program title: Disaster Grants ? Public Assistance CFDA Number: 97.036 Award Period: October 1, 2020 to September 30, 2021 Type of Finding: - Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Code of Federal Regulations (CFR) Section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition: During our testing of allowable costs, we noted there was a lack of documentation of internal control processes in place over compliance. For payroll disbursements, controls exist over wage rates and general payroll; however, there was no formal documentation of review of expenditures to be allocated to the grant or review of the monthly invoices for vaccination events. For indirect costs, there was no formal documentation of review of the indirect cost calculation and amount charged to the grant. Questioned costs: None. Context: During our testing for allowable costs, we noted 6 out of 6 disbursements tested did not include a documented review as well as the indirect cost calculation did not include a documented review. There was various evidence provided showing multiple people were involved in the process; however, the internal control was not formalized. Cause: The grant was awarded quickly and with less structure than others due to community need and focus on speedy response, so there was not as much time to implement strong internal control structure over compliance in place related to this grant. Effect: Without proper internal controls, there is a greater risk of unallowable expenditures being charged to the grant. Recommendation: We recommend the Organization continue to work on implementing a formal documented review process for all expenditures charged to the grant including indirect costs. View of responsible officials: Management will formalize their internal controls over the grant.

2020 ? 002 Federal agency: U.S. Department of Health and Human Services Federal program title: Consolidated Health Centers & ACA Grants for New and Expanded Services Under the Health Centers Act CFDA Number: 93.224 & 93.527 Award Period: October 1, 2019 to September 30, 2020 Type of Finding: ? Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per Title 42 Chapter 1 Subchapter D Section 51C303(f) and (g), ?Health centers must have a schedule of fees or payments for the provision of their health services consistent with locally prevailing rates or charges and designed to cover their reasonable costs of operation. They are also required to have a corresponding schedule of discounts applied and adjusted on the basis of the patient?s ability to pay.? Condition: 1 out of 25 sliding fee adjustments tested were not calculated properly in accordance with the Organization?s policy. For 2 of 25 sliding fee adjustment tested, the Organization was not able to find a retained sliding fee application for the individual due to being HealthStart or homeless patients without income. Under organization policy, staff are to obtain signed statement of income. Questioned costs: None reported as it is below the reporting threshold. Context: For these individuals the sliding fee adjustment category was determined incorrectly, or insufficient documentation retained, but would have still been eligible for sliding fee adjustment under the policy. For the improperly calculated sliding fee application, the sliding fee adjustment would have ended up at a different amount. Cause: Manual errors by individuals performing the sliding fee calculations or filing the related forms. Effect: Patients potentially paying the incorrect amount for encounters as sliding fee adjustment has been calculated incorrectly. Without sufficient supporting documentation retained, the Organization is also not able to provide justification of proper sliding fee adjustment for certain encounters. No specific instances of noncompliance with grant requirements were identified, although there were instances of noncompliance with the Organization?s own policies. The lack of internal controls over these compliance requirements, however, provides an opportunity for noncompliance. Recommendation: We recommend the organization have a documented review process over determinations to ensure accuracy and provide training as needed to mitigate risk of future errors. We also recommend reviewing procedures in place for retaining documentation for sliding fee applications to ensure sufficient detail is retained according to policy, even when an individual indicates zero income. View of responsible officials: There is no disagreement with the audit finding.

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