LUTHERAN SOCIAL SERVICES OF CENTRAL OHIO and Subsidiaries

Assistance Listing, Federal Agency, and Program Name - 93.224, 93.527 - Health Center Program Cluster Federal Award Identification Number and Year - 23H80CS30717, 23H8LCS51933C6, 23H8GCS48653; 2024-2025 Pass through Entity - No Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303 and 42 USC 254b(k)(3)(E), (F), and (G); 42 CFR sections 51c.303(e), (f), and (g); and 42 CFR sections 56.303(e), (f), and (g), health centers must prepare and apply a sliding fee discount schedule (SFDS) so that the amounts owed for health center services by eligible patients are adjusted (discounted) based on the patient’s ability to pay. The Organization is responsible for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the Organization's federal programs. Condition - During the current year, the Organization did not apply the sliding fee scale discount to certain patient claims accurately. During our testing, we noted 13 instances of the sliding fee scale not being accurately applied to patient services out of the 40 transactions tested. Questioned Costs - None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - N/A no questioned costs Identification of How Questioned Costs Were Computed - None Context - During the testing of the sliding fee scale discount, it was noted that 13 of the 40 patient claims tested did not have the sliding fee scale discount properly or consistently applied when the patient was eligible. The Organization was not properly and consistently applying the sliding fee scale discount to patients that were eligible. Cause and Effect - The Organization did not apply the sliding fee scale discount appropriately to the eligible patients. This caused patients to be overcharged for services. Recommendation - The Organization should apply the sliding fee scale discount consistently and accurately to all eligible patients. Views of Responsible Officials and Corrective Action Plan - Management acknowledges the sliding fee scale discount should have been applied consistently and accurately and plan to improve the process going forward. Management corrected the patient accounts by applying the sliding fee scale discount.

Assistance Listing, Federal Agency, and Program Name - 93.224, Department of Health and Human Services, Health Center Program Cluster; 93.243, Department of Health and Human Services, Substance Abuse and Mental Health Services Projects of Regional and National Significance Program; 93.696, Department of Health and Human Services, Certified Community Behavioral Health Clinics Federal Award Identification Number and Year - H8030717, H79SP083277, H79TI085241, H79SM086769; 2023 - 2024 Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Costs of compensation are allowable to the extent that total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the recipient or subrecipient consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with the recipient's or subrecipient's laws, rules, or written policies and meets the requirements of Federal statute, where applicable; and (3) is determined and supported through documentation (CFR 240.430) Condition - During the current year, a lack of control procedures surrounding the review of payroll costs resulted in improper amounts of payroll to be charged to the grant. The Organization was using two different methods to charge payroll costs to grants (indirect and direct) for empoyees which is against the Organizations policy and the grant agreement Questioned Costs - None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - There were 23 employee payroll allocations out of a sample of 81 whose payroll costs were incorrected allocated to the program Cause and Effect - A control was lacking to ensure the payroll costs are being allocated to the programs based on the Organization's policy or grant agreement Recommendation - We recommend a control to be implemented to ensure payroll costs are being properly allocated to grant programs Views of Responsible Officials and Corrective Action Plan - Finance is working with IT and HR to integrate the payroll system with LSS’ accounting system to eliminate manual processes in the creation of the payroll journal entry. There will also be periodic internal audits performed to test payroll allocations.

Assistance Listing, Federal Agency, and Program Name - 93.224, Department of Health and Human Services, Health Center Program Cluster; 93.527, Department of Health and Human Services, Health Center Program Cluster; 93.243, Department of Health and Human Services, Substance Abuse and Mental Health Services Projects of Regional and National Significance Program; 93.696, Department of Health and Human Services, Certified Community Behavioral Health Clinics Federal Award Identification Number and Year - H8030717, H8G48653, H79SP083277, H79TI085241, H79SM086769; 2023 - 2024 Pass-through Entity - N/A Finding Type - Material weakness Repeat Finding - No Criteria - The Organization shall have internal controls in place to ensure reports and cash management drawdowns are prepared accurately and submitted timely as outlined in the Compliance Supplement or grant agreement Condition - During the year, the Organization did not have appropriate review procedures and controls in place related to cash management and reporting over federal programs Questioned Costs - None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - The finding is related to a lack of controls. There were no instances of noncompliance identified in testing, and thus no questioned costs identified. Identification of How Questioned Costs Were Computed - N/A Context - The Organization was not performing or documenting reviews over the cash management, financial, and performance reporting for the programs. Cause and Effect - The Organization has experienced turnover in the business office and at the program level, thus historical procedures and controls were not followed. The Organization does not have policies in place related to grant reporting, therefore financial and performance reports did not have retained documentation of reviews being performed prior to report submission. Recommendation - The Organization should implement procedures and controls to have a review performed and documented over all cash management, financial, and performance reports prior to the report submission Views of Responsible Officials and Planned Corrective Actions - Finance has recent changes in leadership roles and with the change in leadership, has put into place improvements in oversight of cash management and reporting. LSS has a philosophy of continuous improvement and with the current management LSS will ensure that all guidelines and requirements for cash management and reporting for federal programs are met.

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