Lawndale Christian Health Center

Procurement Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Assistance Listing Number: 93.323 Federal Award Number: NU50CK000556 Award Periods: January 1, 2024 – July 31, 2024 Criteria: 2 CFR section 200.320 outlines the acceptable methods of procurement. Purchases below the simplified acquisition threshold, but above the micro-purchase threshold, require that price or rate quotations be obtained from an adequate number of qualified sources as determined by the non- Federal entity. Furthermore, the Organization's procurement policies require the maintaining of records sufficient to detail the history of procurement including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: The Organization did not follow the procedures outlined within its internal policies related to the use of the simplified acquisition method of procurement, including maintaining the necessary documentation to show that price or rate quotations were obtained from an adequate number of qualified sources. Questioned Costs: $252,323. Context: This condition impacted four of five transactions selected for testing. Questioned costs are in accordance with the purpose of the grant, however occurred as a result of a lack of documentation. Cause: The timing of when grant was received (June 2024) and when the period of performance expired (July 2024), was just that the Organization had a limited amount of time to accomplish the program objectives. Thus, the organization used recurring vendors and did not follow the procurement policies and procedures outlined within their internal policies. Effect: The Organization could potentially use federal funds in a manner which is not the most efficient or economical. Repeat Finding: No. Recommendation: We recommend the Organization follow its established policies and procedures related to maintaining necessary documentation to support the method of procurement utilized. Views of Responsible Officials: There is no disagreement with the audit finding.

Suspension and Debarment Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Assistance Listing Number: 93.323 Federal Award Number: NU50CK000556 Award Periods: January 1, 2024 – July 31, 2024 Criteria: 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6 outlines that the non-Federal entity must verify that the agency in which it is entering into a contract is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: The organization did not document that SAM.gov was checked prior to entering into a contract with a vendor. Questioned Costs: None. Context: This condition impacted five of five transactions selected for testing. None of the entities transacted with were determined to be excluded parties per SAM.gov. Cause: Based on the timing of when the grant was received by the Organization (June 2024) and when the period of performance expired (July 2024), the Organization had extremely limited time to accomplish the program objectives. Thus, the organization did not maintain documentation that vendors were verified as not being suspended or debarred prior to entering into the transaction. Effect: The Organization could potentially entered into a transaction with an entity that has been suspended or debarred. Repeat Finding: No. Recommendation: We recommend that the organization retain documentation that Sam.gov was used to verify that a vendor was not suspended, debarred, or otherwise excluded from participating in the transaction prior to contract. To the extent practicable, the organization can engage with a third party that will verify any new and existing vendors have not been suspended or debarred on a monthly basis. Views of Responsible Officials: There is no disagreement with the audit finding.

Finding 2024-001 – Cash Management Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Center Cluster Assistance Listing Number: 93.224 & 93.527 Federal Award Identification Number: H80CS00725-22-03 & H80CS00725-23-00 Award Periods: June 1, 2023 – May 31, 2024 & June 1, 2024 – May 31, 2025 Criteria: CFR § 200.303 Internal controls states that the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Furthermore, CFR § 200.305(b) indicates that the non-Federal entity should minimize the time lapsing between the transfer of funds from the Federal agency and the disbursement of funds by the recipient. Condition: The Organization did not maintain documentation to support the performance of its internal control related to the review and approval of a drawdown request. Questioned Costs: None. Context: This condition occurred in one of the five drawdowns selected for testing. Cause: Turnover within the accounting department. Effect: Unauthorized drawdowns could lead to amounts being drawn in excess of the expenses incurred and charged to a federal grant. Repeat Finding: No. Recommendation: We recommend that management reinforce the current internal control over drawdowns and ensure that when turnover happens, the appropriate employee responsibilities are reassigned. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Opioid Response Grants Assistance Listing Number: 93.788 Federal Award Identification Number: H79TI083278 Pass-Through Entity: Illinois Department of Human Services Pass-Through Number: 43CBC03525 Award Periods: July 1, 2022 – June 30, 2023 Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Costs incurred outside of the period of performance were charged to the grant. Questioned Costs: $26,230 Context: Six of eighteen transactions selected for testing. Cause: Unknown. Effect: The Organization may allocate unallowable costs to the grant. Repeat Finding: No. Recommendation: We recommend that only costs incurred during the period of performance be charged to the grant. For payroll in which periods extend over multiple budget periods, we recommend prorating the amount charged to the grant by days worked within the grant period. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Center Cluster Assistance Listing Number: 93.224 & 93.527 Federal Award Identification Number: H80CS00725-21 and H80CS00725-22 Award Periods: June 1, 2022 – May 31, 2023 and June 1, 2023 – May 31, 2024 Criteria: Health centers must prepare and apply a sliding fee discount schedule so that the amounts owed for health center services by eligible patients are adjusted (discounted) based on the patient’s ability to pay. (42 USC 254(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)). Condition: The Organization incorrectly assessed and/or applied the sliding fee discount to a patient encounter during the year. Questioned Costs: None. Context: One of forty transactions selected for testing. Cause: Unknown. Effect: Patients are not charged according to the Organization's sliding fee scale and their ability to pay. Repeat Finding: No. Recommendation: Management should consider increasing the frequency of its self-reviews of patient encounters or expanding its sample sizes in addition to providing additional training for front desk staff regarding the collection and verification of patient information for each patient. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Center Cluster Assistance Listing Number: 93.224 & 93.527 Federal Award Identification Number: H80CS00725-21 and H80CS00725-22 Award Periods: June 1, 2022 – May 31, 2023 and June 1, 2023 – May 31, 2024 Criteria: Recipients of grants from the Bureau of Primary Health Care Health Center Program are required to prepare and file the Uniform Data System (UDS) report on an annual basis. The UDS report contains various information which has been identified as key line items with the compliance supplement for the health center program cluster. Condition: The amounts reported for Table 8A, line 1, column c and Table 8A, line 3, column c within the UDS report did not agree to the supporting documentation provided by the organization. Questioned Costs: None. Context: One of the key line items within the UDS report contained an amount which did not agree to the supporting documentation provided by the Organization. Total costs were in agreement however a change made to an allocation did not get updated within the final UDS report. Cause: During the UDS preparation process, the Organization was addressing various diagnostic checks which are built into the UDS report. As part of this process, a change was made to Table 5 and the Organization was unaware that this change also resulted in a change being made to Table 8. Effect: Reporting of incorrect amounts within the UDS report. Repeat Finding: No. Recommendation: We recommend the Organization performed a final review of amounts entered within the UDS report, as compared to the supporting schedules, prior to submission. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Center Infrastructure Support Assistance Listing Number: 93.526 Federal Award Identification Number: C8ECS43959-01 Award Periods: September 15, 2021 – September 14, 2024 Criteria: 2 CFR section 200.320 outlines the acceptable methods of procurement. Purchases below the simplified acquisition threshold, but above the micro-purchase threshold, require that price or rate quotations be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Furthermore, the Organization's procurement policies require the maintaining of records sufficient to detail the history of procurement including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price Condition: The organization did not maintain appropriate documentation to support the procurement method utilized for contracts selected for testing. Questioned Costs: None. Context: Three of three transactions selected for testing. Cause: The Center did not create and maintain appropriate documentation to support the method of procurement utilized. Effect: Potential noncompliance with 2 CFR section 200.320(c)(1) - (3). Repeat Finding: No. Recommendation: We recommend the Organization consistently follow its established policies and procedures related to the maintaining of necessary documentation to support the method of procurement utilized. The Organization may also consider qualifying multiple vendors for particular goods/service and then utilizing an approved vendors list. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Provider Relief Fund (PRF) Assistance Listing Number: 93.498 Federal Award Identification Number: n/a Award Periods: PRF period 4 Criteria: §200.303(a) indicates non-federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Organization did not maintain sufficient documentation to demonstrate effective internal controls over selected transactions. Questioned Costs: $3,554. Context: Of the sixty transactions selected for testing, the Organization was unable to provide sufficient documentation for thirteen transactions. Cause: Turnover within the accounts payable department and transition to new accounting software. Effect: Potential for unallowable costs could be charged to the grant. Repeat Finding: No. Recommendation: We recommend the Organization maintain supporting documentation for all expenses (i.e. invoices, etc.) and use electronic means, such as accounts payable spend management software, when possible. Views of Responsible Officials: There is no disagreement with the audit finding.

Assistance Listing Number, Federal Agency, and Program Name - ALN 93.461 - COVID-19 Claims Reimbursement for the Uninsured Program and the COVID-19 Coverage Assistance Fund; CFDA 21.019 - Coronavirus Relief Fund Federal Award Identification Number and Year - None Pass-through Entity - N/A for 93.461; Illinois Department of Health and Human Services for 21.019 Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must prepare appropriate financial statements, including the schedule of expenditures of federal awards, in accordance with 200.510 - financial statements. Per 2 CFR 200.510(b), the auditee must also prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended, as determined in accordance with 200.502 - basis for determining federal awards expended. Condition - Controls in place were not adequate to ensure the schedule of federal expenditures was complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The schedule of expenditures of federal awards initially excluded expenditures of $532,203 related to ALN 93.461 and improperly classified expenditures of $1,584,336 under the Health Centers Cluster that should have been under ALN 21.019. The schedule of expenditures of federal awards (SEFA) was subsequently updated by management to include ALN 93.461 and correctly present the expenditures under ALN 21.019. The improper exclusion of ALN 93.461 did not impact major program determination; however, the initial exclusion of ALN 21.019 did impact major program determination and was selected as a major program once the SEFA was updated by management. Cause and Effect - The Organization did not have adequate procedures and controls in place to timely and accurately complete the schedule of expenditures of federal awards, which resulted in an error in the schedule of expenditures of federal awards and affected major program determination. Recommendation - The Organization should develop processes and controls to ensure that the schedule of expenditures of federal awards is complete and accurate. Views of Responsible Officials and Corrective Action Plan - The Organization's controls for identifying CFDA numbers attached to federal awards were not designed with unsolicited funding from federal sources in mind. The necessary controls have been put in place.

CFDA Number, Federal Agency, and Program Name - CFDA 93.354; U.S Department of Health and Human Services; COVID-19 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response Federal Award Identification Number and Year - April 2, 2020 - October 2, 2020 Pass-through Entity- The City of Chicago, Department of Public Health Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 2 CFR 200 303(a), the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition - The Organization overcharged the program by $6,970 and received reimbursement for this amount in fiscal year 2020. Questioned Costs - None Context - Of the 40 expenses tested, 1 expense was duplicated, resulting in $6,970 overcharge to the program. The Organization received reimbursement for this amount in fiscal year 2020 and recorded it on the initial SEFA (amount was subsequently removed from the final SEFA). Once the Organization became aware of the overcharge in December 2020, the Organization reduced a future reimbursement request in fiscal year 2021 by $6,970. Cause and Effect - The Organization did not have sufficient internal controls and processes to ensure costs charged to the program were not duplicated. The overcharge of $6,970 to the program resulted from a manual process to allocate costs for the transportation department in March and April 2020; this process was subsequently automated when a cost center was set up to track costs in real time. Once the Organization became aware of the overcharge in December 2020, the Organization reduced a future reimbursement request in fiscal year 2021 by $6,970. The Organization adjusted the final SEFA to exclude the overcharge amount of $6,970; this adjustment did not have an impact on major program selection. Recommendation - We recommend the Organization implement a process to review costs charged to the grant to ensure there are no duplicated costs. Views of Responsible Officials and Corrective Action Plan - Management agrees with the finding. A formula was used to allocate certain expenses as part of the contracted obligation with the City of Chicago, Illinois (the "City") to provide services to the City's homeless population in response to the COVID-19 pandemic. The total value of the contract was approximately $3.1 million, but $6,970 of overallocation was identified in the initial round of invoicing. The error was corrected and future invoices utilized the revised calculations. The finding was communicated to the responsible individuals with the City, and the amount was netted against the final reimbursement for the contract.