Third Street Community ClinicNon-Profit

Information on the federal program – Assistance Listing Number 93.224/93.527, Health Center Program Cluster from the U.S. Department of Health and Human Services, Federal Award No. 6 H80CS00581 for project period March 1, 2024 through February 28, 2025 Criteria or specific requirement – Health Centers must prepare and apply a sliding fee discount schedule that incorporates the provisions of 42 CFR 51c.303e through 56.303g to ensure that amounts owed for health center services by eligible patients are adjusted (discounted) based on the patient’s ability to pay. Condition – The audit of the major federal program identified errors in the application of sliding fee adjustments. Cause – The sliding fee calculation was improperly set up within the Electronic Health Record System. Effect or potential effect – Inaccurate application of sliding fee adjustments may result in potential noncompliance with program requirements. Questioned costs – Not applicable Context – Out of a population of 5,510 sliding fee adjustments, a sample of 25 adjustments were tested. Out of the 25 tested, 5 adjustments were incorrectly calculated based on the Organization’s sliding fee scales and the patient’s sliding fee application. A non-statistical sampling methodology was used to select the sample. Identification as a repeat finding, if applicable – Not a repeat finding. Recommendation – We recommend that the Organization perform a review of the calculation of the sliding fee adjustments within the Electronic Health Record system to ensure it is properly set up. Additionally, we recommend that a member of management with an understanding of the Organization’s billing and sliding fee policies regularly review a sample of sliding fee adjustments in comparison to the Organization’s sliding fee policy. Views of responsible officials and planned corrective actions – The sliding fee adjustment errors resulted from an error in the set up of the automated adjustment calculation within the Electronic Health Record system. Management has identified the error with plans to ensure correction within the system. Further, the Organization will implement a process to periodically review sliding fee adjustments throughout the year for accuracy.

Information on the federal program – Assistance Listing Number 93.224/93.527, Health Center Program Cluster from the U.S. Department of Health and Human Services, Federal Award No. 6 H80CS00581 for project period March 1, 2024 through February 28, 2025. Criteria or specific requirement – Health Centers must comply with federal reporting requirements. Condition – The Organization did not have data to support certain line items reported on the Uniform Data System (UDS) report filed. The amounts reported within table 5 line 8 column b and b2, table 5 line 10a, column b and b2 were not supportable by underlying data, and the amounts reported within table 9E line 1g column a, and line 1q column did not agree to underlying supporting data available. Cause – There was a lack of detailed review of the submitted report by someone with knowledge of the reporting requirements. Effect or potential effect – Inaccurate filing of reports may result in the federal program not being properly monitored, thus resulting in potential noncompliance with program requirements. Questioned costs – Not applicable Context – Out of a population of 1 special report that was required to be submitted during the year under audit (UDS), we selected this 1 report for testing. Identification as a repeat finding, if applicable – Not a repeat finding. Recommendation – We recommend management implement an additional level of review by someone with knowledge of the reporting requirements. Views of responsible officials and planned corrective actions – To ensure compliance with federal reporting standards, the Organization will require a secondary review of all federal reports submitted to granting agencies. The designated secondary reviewer shall be an individual that has strong knowledge of the reporting requirements.

Information on the federal program – Assistance Listing Number 93.224/93.527, Health Center Program Cluster from the U.S. Department of Health and Human Services, Federal Award No. 6 H80CS00581-22-01 for project period March 1, 2023 through February 29, 2024 Criteria or specific requirement – Health Centers must comply with federal procurement standards. Condition – The Organization did not comply with its procurement policy which was designed to conform with federal procurement standards. Questioned costs – Not applicable Context – Out of a population of 15 procurement transactions which exceeded the federal micro-purchase threshold, a sample of 2 procurement transactions were tested, and 1 was not in compliance with the Organization’s policy. A non-statistical sampling methodology was used to select the sample. Effect – Federal procurement standards were not appropriately followed. Cause – A lack of sufficient supervisory review of procurement procedures was followed for purchases using federal funding. Identification as a repeat finding, if applicable – Not a repeat finding. Recommendation – We recommend that the Organization implement additional internal controls surrounding purchase procedures when utilizing federal funding. Views of responsible officials and planned corrective actions – To ensure compliance with the Organization’s procurement policy going forward, the Organization will require that all invoices and purchase orders relating to federal procurements be approved and signed by the CFO. The CFO will ensure that all necessary procurement actions have been performed and the history of procurement is documented prior to approval of the invoice or purchase order.

Information on the federal program - Assistance Listing Number 93.224/93.527, Health Center Program Cluster from the U.S. Department of Health and Human Services, Federal Award No. 6 H80CS00581-21-01 for project period March 1, 2022 through February 28, 2023 Criteria or specific requirement – Health Centers must comply with federal reporting requirements Condition – The Organization did not accurately complete its Federal Financial Report. Questioned costs – Not applicable Context – Out of a population of 1 financial report required to be submitted during the year under audit, 1 financial report was tested. Effect – The Federal Financial Report was submitted reported with incorrect data for lines 10a., 10b, 10l., and 10n. Cause – There was a lack of detailed review of the submitted report by someone with knowledge of the reporting requirements. Identification as a repeat finding, if applicable – Not a repeat finding. Recommendation – We recommend management implement an additional level of review by someone with knowledge of the reporting requirements. Views of responsible officials and planned corrective actions – To ensure compliance with federal reporting standards, the Organization will require a secondary review of all federal reports submitted to granting agencies. The designated secondary reviewer shall be an individual that has strong knowledge of the reporting requirements.

Finding 2021-001 Federal Agency: Department of Health and Human Services Federal Program Title: Health Center Cluster - Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Assistance Listing Number: 93.224 Award Period: Various See finding 2021-001 described in Section II ? Financial Statement Findings Questioned Costs None Repeat Finding No Section II ? Financial Statement Findings Finding 2021-001 Specific requirement Controls should be in place that ensure the organization?s policies regarding purchasing and cash disbursements are followed. Condition During the year ended December 31, 2021, the organization did not follow all internal controls policies related to purchasing and cash disbursements. Context Purchasing The Organization?s Purchasing Policy requires three bids to be obtained for all purchases of single items or a functional system valued at $10,001 or more. If unable to attain multiple bids due to lack of options, justification must accompany the request for purchase. In a sample of 40 total purchases, we identified 4 purchases that required three bids but no documentation was available to support three bids were obtained prior to purchase. In the same sample we identified one purchase order that did not indicate approval by the appropriate level within the Organization. Cash Disbursements The Organization?s Fiscal Policies require two signatures on all checks over $20,000. In a sample of 40 total disbursements, we identified 2 checks that were over $20,000 and only had one signature. Cause During 2021 turnover in the Director of Nursing program impacted ability to access records related to procurement. The speed at which operations were moving due to the pandemic also may have impacted typical record keeping and approval processes. Effect No inappropriate purchases or disbursements were identified, however, controls to identify such events were not consistently followed. Recommendation We recommend management revisits internal controls policies to evaluate whether procedures indicated are still appropriate, and follows all internal control policies in place. We also recommend considering a policy related to record retention that ensures accessibility to documentation in the event of employee turnover. Management Response It is the policy of Third Street Family Health Services to use a system of internal controls to protect company assets and ensure the integrity and reliability of its information. Management will secure compliance with policies and procedures and ensure the performance of its business is safeguarded. In the year 2021 we have had much turnover, not only in finance but also in our entire organization. One other employee and I have done most of the work concerning the following up for purchase orders and cash disbursements. We had two temporary workers that did their best to help fill in. That said, I realized that many items and controls were not being followed and knew I had to do something about it. With these issues in mind, I reviewed five different companies to make a change in accounting software that would ensure we could do more with less. I specifically chose software that had fund accounting and accounts payable automation, fixed assets, budgeting, and more to ensure that we would meet our policy with internal controls. This system additionally encompasses a purchase order system that one can attach quotes, receipts, and more. It will also send the appropriate authorized official to sign off on the purchase order. All these items can be done electronically and be saved in this specific area of the software. I feel the software we chose has all the needs we are looking for and more so we can continue our growth and still be in compliance. This proposal for a software system was presented to the board and approved in 2022. The Cash Disbursements issue was nothing more than a new employee not knowing the policy well enough to understand that two signatures were required. We are implementing more training and policy reviews for new employees that start with us. One of the first things I explain to a new employee is to read the policies and make sure they understand them.