EIN: 364161801
UEI: NKL8CX8CHTK7
Data as of August 21, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 30, 2026. 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 September 30, 2026 (39 days from today).
What is a management decision? →Finding 2025-001 Material Weakness in Internal Control Over Reporting Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2025 Criteria FFHC is responsible for preparing and submitting its annual Universal Report and Federal Financial Reports in a timely manner. Condition For AL No. 93.224, Health Center Program and AL 93.527, Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program, we noted that the required Universal Report was not submitted by the applicable deadline. Additionally, we noted that one (1) of the three (3) required annual Federal Financial Reports for the grants within these programs were not submitted by applicable deadlines. Cause The instances of noncompliance noted occurred due to human error as staff members were learning new procedures designed as corrective actions for this finding as identified in the audit during the previous year. Effect FFHC was not in compliance with the Reporting compliance requirements for its federally funded programs as prescribed by Uniform Guidance. Questioned Costs None reported. Repeat Finding Yes. See Findings 2024-002 and 2023-002. Recommendation We recommend that FFHC enforce its current specific internal control procedures to ensure compliance with applicable federal reporting requirements and ensure that all reports be filed timely in accordance with the federal reporting requirements. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Show full finding ▾Hide full finding ▴Finding 2025-001 Material Weakness in Internal Control Over Reporting Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2025 Criteria FFHC is responsible for preparing and submitting its annual Universal Report and Federal Financial Reports in a timely manner. Condition For AL No. 93.224, Health Center Program and AL 93.527, Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program, we noted that the required Universal Report was not submitted by the applicable deadline. Additionally, we noted that one (1) of the three (3) required annual Federal Financial Reports for the grants within these programs were not submitted by applicable deadlines. Cause The instances of noncompliance noted occurred due to human error as staff members were learning new procedures designed as corrective actions for this finding as identified in the audit during the previous year. Effect FFHC was not in compliance with the Reporting compliance requirements for its federally funded programs as prescribed by Uniform Guidance. Questioned Costs None reported. Repeat Finding Yes. See Findings 2024-002 and 2023-002. Recommendation We recommend that FFHC enforce its current specific internal control procedures to ensure compliance with applicable federal reporting requirements and ensure that all reports be filed timely in accordance with the federal reporting requirements. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Finding 2025-001 Material Weakness in Internal Control Over Reporting Compliance Requirements Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2025 Criteria FFHC is responsible for preparing and submitting its annual Universal Report and Federal Financial Reports in a timely manner. Views of Responsible Officials and Planned Corrective Actions Friend Family Health Center Inc. and Affiliates (Organization) will implement the following corrective actions for the fiscal year ending June 30, 2025 to remediate the finding and address the cause of the finding. The Organization will implement the following corrective actions for fiscal year 2026 to remediate the finding and address the cause of the finding. The Organization has hired staff with higher technical accounting skills than the previous staff. The following staff have been hired full-time or will be hired soon: Payroll and Benefits Specialist, Finance Manager, Senior Staff Accountant, Accounts Payables and Receivables Specialist, and a Purchasing Specialist. The Chief Financial Officer (CFO) will be responsible for the implementation of the corrective action plan and will oversee all related finance activities. • To ensure compliance with timely submission of financial reports (FFR), Friend Health will implement a structured timeline that aligns with all regulatory deadlines and includes internal checkpoints to monitor progress. • The Organization has implemented a new Grants (Project) tracking module to better help with grants and contracts reporting and compliance. This module will track all deadline dates for all of the grants, including deadlines for submitting FFR’s. All grant-related year-end audit procedures have been transitioned to the Finance Manager who has experience with financial audits and compliance and reporting for City, State, and Federal grants. •The Organization will ensure that any personnel involved in financial reporting have the technical expertise to help with the preparation, review, and analysis of the Federal Financial Reports. The target date for full implementation of these corrective actions is June 30, 2026. The responsible party for the planned resources will be Wendy Thompson, Chief Executive Officer (312) 682-6110. Our address is 800 East 55th Street, Chicago, IL 60615.
2024-002, 2023-002
Finding 2025-002 Material Weakness in Internal Control Over Special Tests and Provisions Compliance Requirements Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2025 Criteria FFHC is responsible for keeping adequate supporting documentation of the calculation of patient service fees for those patients who qualify for discounted fees based on family size and household income. FFHC is also required to apply discounted fees accurately based on an approved sliding fee scale that meets federal compliance requirements. Condition For AL No. 93.224, Health Center Program and AL 93.527, Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program, we noted nine (9) of forty (40) patient accounts selected for testing for which there was an exception when testing compliance with sliding fee discount compliance requirement. We noted the following exceptions: • We were not able to obtain supporting documentation of the household size and/or household income for two (2) of forty (40) patient accounts. • We noted three (3) of forty (40) patient accounts for which the sliding fee discount charged appeared to be incorrectly calculated based on the documented household size and income. • We noted four (4) of forty (40) patient accounts for which the amount paid by the patient didn’t match the calculated discounted fee. Cause The instances of noncompliance noted occurred due to human error as staff members were learning new procedures designed as corrective actions for this finding as identified in the audit during the previous year. Effect FFHC was not in compliance with the Special Tests and Provisions requirements applicable to the Health Center Program and Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program as prescribed by Uniform Guidance. Questioned Costs None reported. Repeat Finding Yes. See Findings 2024-003, 2023-003 and 2022-002. Recommendation We recommend that FFHC continue to implement its corrective action plan and also continue to enforce its current policy and related internal control procedures to ensure compliance with the requirement to provide discounted fees based on federally determined poverty levels for fiscal year 2025. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Show full finding ▾Hide full finding ▴Finding 2025-002 Material Weakness in Internal Control Over Special Tests and Provisions Compliance Requirements Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2025 Criteria FFHC is responsible for keeping adequate supporting documentation of the calculation of patient service fees for those patients who qualify for discounted fees based on family size and household income. FFHC is also required to apply discounted fees accurately based on an approved sliding fee scale that meets federal compliance requirements. Condition For AL No. 93.224, Health Center Program and AL 93.527, Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program, we noted nine (9) of forty (40) patient accounts selected for testing for which there was an exception when testing compliance with sliding fee discount compliance requirement. We noted the following exceptions: • We were not able to obtain supporting documentation of the household size and/or household income for two (2) of forty (40) patient accounts. • We noted three (3) of forty (40) patient accounts for which the sliding fee discount charged appeared to be incorrectly calculated based on the documented household size and income. • We noted four (4) of forty (40) patient accounts for which the amount paid by the patient didn’t match the calculated discounted fee. Cause The instances of noncompliance noted occurred due to human error as staff members were learning new procedures designed as corrective actions for this finding as identified in the audit during the previous year. Effect FFHC was not in compliance with the Special Tests and Provisions requirements applicable to the Health Center Program and Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program as prescribed by Uniform Guidance. Questioned Costs None reported. Repeat Finding Yes. See Findings 2024-003, 2023-003 and 2022-002. Recommendation We recommend that FFHC continue to implement its corrective action plan and also continue to enforce its current policy and related internal control procedures to ensure compliance with the requirement to provide discounted fees based on federally determined poverty levels for fiscal year 2025. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Finding 2025-002 Material Weakness in Internal Control Over Special Tests and Provisions Compliance Requirements Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2025 Criteria FFHC is responsible for keeping adequate supporting documentation of the calculation of patient service fees for those patients who qualify for discounted fees based on family size and household income. FFHC is also required to apply discounted fees accurately based on an approved sliding fee scale that meets federal compliance requirements. Views of Responsible Officials and Planned Corrective Actions Friend Family Health Center Inc. and Affiliates (Organization) will implement the following corrective actions for the fiscal year ending June 30, 2025 to remediate the finding and address the cause of the finding. The Organization will implement the following corrective actions for fiscal year 2026 to remediate the finding and address the cause of the finding. •The Chief Financial Officer (CFO) will be responsible for the implementation of the corrective action plan and will oversee all related finance activities. •FFHC will enforce its current policy and related internal control procedures to ensure that supporting documentation of family size and household income is maintained for all patients that receive discounted patient service fees in relation to the Health Centers Program and Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program. •FFHC will enforce its current policy and related internal control procedures to ensure that discounted patient service fees are properly calculated and charged based on the applicable approved sliding fee scale. The target date for full implementation of these corrective actions is June 30, 2026. The responsible party for the planned resources will be Wendy Thompson, Chief Executive Officer (312) 682-6110. Our address is 800 East 55th Street, Chicago, IL 60615.
2024-003, 2023-003, 2022-002
FAC accepted this audit on October 11, 2025 — management decision was due April 11, 2026.
Finding 2024-001 Noncompliance with Federal and State Reporting Requirements Assistance Listing Numbers 93.224 Health Centers Program 93.527 Affordable Care Act Grants (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services Passthrough Agency N/A Award Number/Year 2024 Criteria Uniform Guidance requires that entities required to complete a single audit submit a Data Collection Form, schedule of expenditures of federal awards (SEFA) and single audit reports to the Federal Audit Clearinghouse within the earlier of thirty (30) calendar days after receipt of the auditor’s report or nine (9) months after the end of the audit period. Condition FFHC did not submit its Data Collection Form and audited financial statements and SEFA to the Federal Audit Clearinghouse website within nine (9) months of June 30, 2024. Cause This condition was due to FFHC being understaffed within its accounting and finance department resulting in a significant delay in completing the recording of financial transactions, performing account reconciliations and preparing financial reports available for audit. Compliance Findings Finding 2024-001 Noncompliance with Federal and State Reporting Requirements (continued) Effect The effect is that controls over the financial reporting process were weakened thereby increasing the risk that material misstatements could be included in the financial statements without management being aware. Additionally, noncompliance with financial reporting deadlines could cause funding sources for FFHC to delay providing funding for the current fiscal year. Questioned Costs None noted. Repeat Finding Yes. See Finding 2023-003 in the summary schedule of prior audit findings. Recommendation We recommend that management 1) hire personnel within its accounting and finance department so that all defined tasks can be performed in a more timely manner and/or 2) evaluate its current processes to determine how to make them more efficient so that the current personnel within the accounting and finance department are able to complete their tasks in a more timely manner. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Show full finding ▾Hide full finding ▴Finding 2024-001 Noncompliance with Federal and State Reporting Requirements Assistance Listing Numbers 93.224 Health Centers Program 93.527 Affordable Care Act Grants (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services Passthrough Agency N/A Award Number/Year 2024 Criteria Uniform Guidance requires that entities required to complete a single audit submit a Data Collection Form, schedule of expenditures of federal awards (SEFA) and single audit reports to the Federal Audit Clearinghouse within the earlier of thirty (30) calendar days after receipt of the auditor’s report or nine (9) months after the end of the audit period. Condition FFHC did not submit its Data Collection Form and audited financial statements and SEFA to the Federal Audit Clearinghouse website within nine (9) months of June 30, 2024. Cause This condition was due to FFHC being understaffed within its accounting and finance department resulting in a significant delay in completing the recording of financial transactions, performing account reconciliations and preparing financial reports available for audit. Compliance Findings Finding 2024-001 Noncompliance with Federal and State Reporting Requirements (continued) Effect The effect is that controls over the financial reporting process were weakened thereby increasing the risk that material misstatements could be included in the financial statements without management being aware. Additionally, noncompliance with financial reporting deadlines could cause funding sources for FFHC to delay providing funding for the current fiscal year. Questioned Costs None noted. Repeat Finding Yes. See Finding 2023-003 in the summary schedule of prior audit findings. Recommendation We recommend that management 1) hire personnel within its accounting and finance department so that all defined tasks can be performed in a more timely manner and/or 2) evaluate its current processes to determine how to make them more efficient so that the current personnel within the accounting and finance department are able to complete their tasks in a more timely manner. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Finding 2024-001 Noncompliance with Federal and State Reporting Requirements Assistance Listing Numbers 93.224 Health Centers Program 93.527 Affordable Care Act Grants (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services Passthrough Agency N/A Award Number/Year 2024 Criteria Uniform Guidance requires that single audits be completed, and the reporting package submitted to the Federal Audit Clearinghouse within the earlier of thirty (30) calendar days after receipt of the auditor’s report or nine (9) months after the end of the audit period. Views of Responsible Officials and Planned Corrective Actions Friend Family Health Center Inc. and Affiliates (Organization) will implement the following corrective actions for the fiscal year ending June 30, 2024 to remediate the finding and address the cause of the finding. The Organization will implement the following corrective actions for fiscal year 2024 to remediate the finding and address the cause of the finding. The Organization has hired staff with higher technical accounting skills than the previous staff. The following staff have been hired full-time or will be hired soon: Payroll and Benefits Specialist, Grant Accountant, Senior Staff Accountant, Accounts Payables and Receivables Specialist, and a Purchasing Specialist. • The Chief Financial Officer (CFO) will be responsible for the implementation of the corrective action plan, and will oversee all related finance activities. To ensure compliance with timely submission of financial and Single audit reports, Friend Health will implement a structured timeline that aligns with all regulatory deadlines and includes internal checkpoints to monitor progress. The audit engagement will begin within sixty (60) days of fiscal year-end. Key staff members will be assigned clear responsibilities, and regular status meetings will be held to track report preparation and address any issues promptly. Friend Health will also enhance coordination with its external auditors by providing them with all necessary documentation in advance to avoid delays. Additionally, further investment will be made to train relevant team members on audit requirements and reporting standards to improve accuracy and efficiency. These steps will ensure that all deadlines are met and full compliance is maintained moving forward. • The Organization has implemented procedures for staff accountants to prepare balance sheet reconciliations monthly with a monthly review performed by the CFO. All balance sheet accounts are reconciled to external data for verification on a monthly basis. All revenue accounts will be reconciled to external data for verification on a monthly basis. • The Organization has implemented a new accounting system – Sage Intacct. Additionally, we have implemented a grants project tracking module to better help with grants and contracts reporting and compliance. • The Organization has implemented a month-end checklist for all monthly entries to be completed by assigned finance personnel. We are ensuring that all staff are trained adequately to handle any assigned task. All monthly entries are required to be reviewed and approved by the CFO prior to posting to the general ledger within our new accounting software. All appropriate backup documentation will be saved and stored within the accounting software. • All grant related year-end audit procedures have been transitioned to the Grant Accountant who has experience with financial audits and compliance and reporting for City, State, and Federal grants. • The Organization will ensure that Finance personnel receive a minimum of twenty-five (25) hours of training annually of relevant accounting topics including updates to generally accepted accounting principles, generally accepted government accounting principles, nonprofit and governmental financial reporting, and other related accounting trainings. • The Organization will ensure that any personnel involved in financial reporting have the technical expertise to help with the preparation, review, and analysis of the financial statements and supplementary information. The target date for full implementation of these corrective actions is December 30, 2025. The presponsible party for the planned resources will be Wendy Thompson, Chief Executive Officer (312) 682-6110. Our address is 340 E. 51st St., Chicago, IL 60615.
2023-001
Finding 2024-002 Material Weakness in Internal Control Over Reporting Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2024 Criteria FFHC is responsible for preparing and submitting its annual Universal Report and Federal Financial Reports in a timely manner. Condition For AL No. 93.224, Health Center Program and AL 93.527, Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program, we noted that the required Universal Report was not submitted by the applicable deadline. Additionally, we noted that two (2) of the four (4) required annual Federal Financial Reports for the grants within these programs were not submitted by applicable deadlines. Cause During fiscal year 2024 FFHC was still in the process of getting its accounting records up to date, resulting in the late completion and submission of the Universal Data Report and Federal Financial Reports for the grants within these programs.Effect FFHC was not in compliance with the Reporting requirements for its federally funded programs as prescribed by Uniform Guidance. Questioned Costs None reported. Repeat Finding Yes. Recommendation We recommend that FFHC enforce its current specific internal control procedures to ensure compliance with applicable federal reporting requirements and ensure that all reports be filed timely in accordance with the federal reporting requirements. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Show full finding ▾Hide full finding ▴Finding 2024-002 Material Weakness in Internal Control Over Reporting Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2024 Criteria FFHC is responsible for preparing and submitting its annual Universal Report and Federal Financial Reports in a timely manner. Condition For AL No. 93.224, Health Center Program and AL 93.527, Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program, we noted that the required Universal Report was not submitted by the applicable deadline. Additionally, we noted that two (2) of the four (4) required annual Federal Financial Reports for the grants within these programs were not submitted by applicable deadlines. Cause During fiscal year 2024 FFHC was still in the process of getting its accounting records up to date, resulting in the late completion and submission of the Universal Data Report and Federal Financial Reports for the grants within these programs.Effect FFHC was not in compliance with the Reporting requirements for its federally funded programs as prescribed by Uniform Guidance. Questioned Costs None reported. Repeat Finding Yes. Recommendation We recommend that FFHC enforce its current specific internal control procedures to ensure compliance with applicable federal reporting requirements and ensure that all reports be filed timely in accordance with the federal reporting requirements. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Finding 2024-002 Material Weakness in Internal Control Over Reporting Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2024 Criteria FFHC is responsible for preparing and submitting its annual Universal Report and Federal Financial Reports in a timely manner. Views of Responsible Officials and Planned Corrective Actions Friend Family Health Center Inc. and Affiliates (Organization) will implement the following corrective actions for the fiscal year ending June 30, 2024 to remediate the finding and address the cause of the finding. The Organization will implement the following corrective actions for fiscal year 2024 to remediate the finding and address the cause of the finding. The Organization has hired staff with higher technical accounting skills than the previous staff. The following staff have been hired full-time or will be hired soon: Payroll and Benefits Specialist, Grant Accountant, Senior Staff Accountant, Accounts Payables and Receivables Specialist, and a Purchasing Specialist.• The Organization has implemented a new accounting system – Sage Intacct. Additionally, we have implemented a grants project tracking module to better help with grants and contracts reporting and compliance. • All grant related year-end audit procedures have been transitioned to the Grant Accountant who has experience with financial audits and compliance and reporting for City, State, and Federal grants. • The Organization will ensure that Finance personnel receive a minimum of twenty-five (25) hours of training annually of relevant accounting topics including updates to generally accepted accounting principles, generally accepted government accounting principles, nonprofit and governmental financial reporting, and other related accounting trainings. • The Organization will ensure that any personnel involved in financial reporting have the technical expertise to help with the preparation, review, and analysis of the Federal Financial Reports and the Universal Report. The target date for full implementation of these corrective actions is December 30, 2025. The responsible party for the planned resources will be Wendy Thompson, Chief Executive Officer (312) 682-6110. Our address is 340 E. 51st St., Chicago, IL 60615. • The Chief Financial Officer (CFO) will be responsible for the implementation of the corrective action plan and will oversee all related finance activities. • To ensure timely submission of Federal Financial Reports (FFR) to HRSA, Friend Health will implement a robust internal calendar that includes all HRSA reporting deadlines along with earlier internal due dates for preparation and review. Designated financial and grants management staff will be responsible for compiling and verifying the required data well in advance of the submission deadline. Friend Health will conduct regular internal reviews to ensure accuracy, completeness, and compliance with HRSA guidelines. Additionally, staff will be provided with ongoing training on HRSA reporting requirements and utilizing reporting tools or software that streamline the FFR preparation process. These proactive measures will help maintain compliance and prevent future delays. • The Organization will document accounting policies and procedures to reflect the new month-end processes and provide training to staff on current and future policies.
2023-002
Finding 2024-003 Material Weakness in Internal Control Over Special Tests and Provisions Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2024Criteria FFHC is responsible for keeping adequate supporting documentation of the calculation of patient service fees for those patients who qualify for discounted fees based on family size and household income. FFHC is also required to apply discounted fees accurately based on an approved sliding fee scale that meets federal compliance requirements. Condition For AL No. 93.224, Health Center Program and AL 93.527, Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program, we were not able to obtain supporting documentation of the household income for any of the forty (40) patients selected for testing, thus we were not able to recalculate discounted fees in order to determine whether they were in compliance with special tests and provisions for these programs. Cause During fiscal year 2024 sliding scale fees were not properly documented due to the allowance of telehealth visits and limited staff available to collect and maintain proper documentation. Effect FFHC was not in compliance with the Special Tests and Provisions requirements applicable to the Health Center Program and Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program as prescribed by Uniform Guidance. Questioned Costs None reported. Repeat Finding Yes. See Findings 2023-003, 2022-002 and 2021-003.Recommendation We recommend that FFHC enforce its current policy and related internal control procedures to ensure compliance with the requirement to provide discounted fees based on federally determined poverty levels for fiscal year 2024. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Show full finding ▾Hide full finding ▴Finding 2024-003 Material Weakness in Internal Control Over Special Tests and Provisions Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2024Criteria FFHC is responsible for keeping adequate supporting documentation of the calculation of patient service fees for those patients who qualify for discounted fees based on family size and household income. FFHC is also required to apply discounted fees accurately based on an approved sliding fee scale that meets federal compliance requirements. Condition For AL No. 93.224, Health Center Program and AL 93.527, Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program, we were not able to obtain supporting documentation of the household income for any of the forty (40) patients selected for testing, thus we were not able to recalculate discounted fees in order to determine whether they were in compliance with special tests and provisions for these programs. Cause During fiscal year 2024 sliding scale fees were not properly documented due to the allowance of telehealth visits and limited staff available to collect and maintain proper documentation. Effect FFHC was not in compliance with the Special Tests and Provisions requirements applicable to the Health Center Program and Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program as prescribed by Uniform Guidance. Questioned Costs None reported. Repeat Finding Yes. See Findings 2023-003, 2022-002 and 2021-003.Recommendation We recommend that FFHC enforce its current policy and related internal control procedures to ensure compliance with the requirement to provide discounted fees based on federally determined poverty levels for fiscal year 2024. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Finding 2024-003 Material Weakness in Internal Control Over Special Tests and Provisions Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2024 Criteria FFHC is responsible for keeping adequate supporting documentation of the calculation of patient service fees for those patients who qualify for discounted fees based on family size and household income. FFHC is also required to apply discounted fees accurately based on an approved sliding fee scale that meets federal compliance requirements.Views of Responsible Officials and Planned Corrective Actions Friend Family Health Center Inc. and Affiliates (Organization) will implement the following corrective actions for the fiscal year ending June 30, 2024 to remediate the finding and address the cause of the finding. The Organization will implement the following corrective actions for fiscal year 2024 to remediate the finding and address the cause of the finding. • The Chief Financial Officer (CFO) will be responsible for the implementation of the corrective action plan and will oversee all related finance activities. • FFHC will enforce its current policy and related internal control procedures to ensure that supporting documentation of family size and household income is maintained for all patients that receive discounted patient service fees in relation to the Health Centers Program and Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program. • FFHC will enforce its current policy and related internal control procedures to ensure that discounted patient service fees are properly calculated and charged based on the applicable approved sliding fee scale. The target date for full implementation of these corrective actions is December 30, 2025. The responsible party for the planned resources will be Wendy Thompson, Chief Executive Officer (312) 682-6110. Our address is 340 E. 51st St., Chicago, IL 60615.
2023-003
FAC accepted this audit on June 16, 2025 — management decision was due December 16, 2025.
Finding 2023-001 Noncompliance with Federal and State Reporting Requirements Assistance Listing Numbers 93.224 Health Centers Program 93.527 Affordable Care Act Grants (ACA) for New and Expanded Services Under the Health Center Program 93.526 Affordable Care Act (ACA) Grants for Capital Development in Health Centers Federal Agency U.S. Department of Health and Human Services Passthrough Agency N/A Award Number/Year 2023 Criteria Uniform Guidance requires that entities required to complete a single audit submit a Data Collection Form, schedule of expenditures of federal awards (SEFA) and single audit reports to the Federal Audit Clearinghouse within the earlier of thirty (30) calendar days after receipt of the auditor’s report or nine (9) months after the end of the audit period. Condition FFHC did not submit its Data Collection Form and audited financial statements and SEFA to the Federal Audit Clearinghouse website within nine (9) months of June 30, 2023. Cause This condition was due to FFHC being understaffed within its accounting and finance department resulting in a significant delay in completing the recording of financial transactions, performing account reconciliations and preparing financial reports available for audit. Effect The effect is that controls over the financial reporting process were weakened thereby increasing the risk that material misstatements could be included in the financial statements without management being aware. Additionally, noncompliance with financial reporting deadlines could cause funding sources for FFHC to delay providing funding for the current fiscal year. Questioned Costs None noted. Repeat Finding Yes. See Finding 2022-003 in the summary schedule of prior audit findings. Recommendation We recommend that management 1) hire personnel within its accounting and finance department so that all defined tasks can be performed in a more timely manner and/or 2) evaluate its current processes to determine how to make them more efficient so that the current personnel within the accounting and finance department are able to complete their tasks in a more timely manner. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Show full finding ▾Hide full finding ▴Finding 2023-001 Noncompliance with Federal and State Reporting Requirements Assistance Listing Numbers 93.224 Health Centers Program 93.527 Affordable Care Act Grants (ACA) for New and Expanded Services Under the Health Center Program 93.526 Affordable Care Act (ACA) Grants for Capital Development in Health Centers Federal Agency U.S. Department of Health and Human Services Passthrough Agency N/A Award Number/Year 2023 Criteria Uniform Guidance requires that entities required to complete a single audit submit a Data Collection Form, schedule of expenditures of federal awards (SEFA) and single audit reports to the Federal Audit Clearinghouse within the earlier of thirty (30) calendar days after receipt of the auditor’s report or nine (9) months after the end of the audit period. Condition FFHC did not submit its Data Collection Form and audited financial statements and SEFA to the Federal Audit Clearinghouse website within nine (9) months of June 30, 2023. Cause This condition was due to FFHC being understaffed within its accounting and finance department resulting in a significant delay in completing the recording of financial transactions, performing account reconciliations and preparing financial reports available for audit. Effect The effect is that controls over the financial reporting process were weakened thereby increasing the risk that material misstatements could be included in the financial statements without management being aware. Additionally, noncompliance with financial reporting deadlines could cause funding sources for FFHC to delay providing funding for the current fiscal year. Questioned Costs None noted. Repeat Finding Yes. See Finding 2022-003 in the summary schedule of prior audit findings. Recommendation We recommend that management 1) hire personnel within its accounting and finance department so that all defined tasks can be performed in a more timely manner and/or 2) evaluate its current processes to determine how to make them more efficient so that the current personnel within the accounting and finance department are able to complete their tasks in a more timely manner. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Finding 2023-001 Noncompliance with Federal and State Reporting Requirements Assistance Listing Numbers 93.224 Health Centers Program 93.527 Affordable Care Act Grants (ACA) for New and Expanded Services Under the Health Center Program 93.526 Affordable Care Act (ACA) Grants for Capital Development in Health Centers Federal Agency U.S. Department of Health and Human Services Passthrough Agency N/A Award Number/Year 2023 Criteria Uniform Guidance requires that single audits be completed, and the reporting package submitted to the Federal Audit Clearinghouse within the earlier of thirty (30) calendar days after receipt of the auditor’s report or nine (9) months after the end of the audit period. Views of Responsible Officials and Planned Corrective Actions Friend Family Health Center Inc. and Affiliates (Organization) will implement the following corrective actions for the fiscal year ending June 30, 2023, to remediate the finding and address the cause of the finding. The Organization will implement the following corrective actions for fiscal year 2023 to remediate the finding and address the cause of the finding. The Organization has hired staff with higher technical accounting skills than the previous staff. The following staff have been hired full-time or will be hired soon: Payroll and Benefits Specialist, Grant Accountant, Senior Staff Accountant, Accounts Payables and Receivables Specialist, and a Purchasing Specialist. • The Chief Financial Officer (CFO) will be responsible for the implementation of the corrective action plan and will oversee all related finance activities. • The Organization will document accounting policies and procedures to reflect the new month-end processes and provide training to staff on current and future policies. • The Organization has implemented procedures for staff accountants to prepare balance sheet reconciliations monthly with a monthly review performed by the CFO. All balance sheet accounts are reconciled to external data for verification on a monthly basis. All revenue accounts will be reconciled to external data for verification on a monthly basis. • The Organization has implemented a new accounting system – Sage Intacct. Additionally, we have implemented a grants project tracking module to better help with grants and contracts reporting and compliance. • The Organization has implemented a month-end checklist for all monthly entries to be completed by assigned finance personnel. We are ensuring that all staff are trained adequately to handle any assigned task. All monthly entries are required to be reviewed and approved by the CFO prior to posting to the general ledger within our new accounting software. All appropriate backup documentation will be saved and stored within the accounting software. • All grant-related year-end audit procedures have been transitioned to the Grant Accountant who has experience with financial audits and compliance and reporting for City, State, and Federal grants. • The Organization will ensure that Finance personnel receive a minimum of twenty-five (25) hours of training annually of relevant accounting topics including updates to generally accepted accounting principles, generally accepted government accounting principles, nonprofit and governmental financial reporting, and other related accounting trainings. • The Organization will ensure that any personnel involved in financial reporting have the technical expertise to help with the preparation, review, and analysis of the financial statements and supplementary information. The target date for full implementation of these corrective actions is December 30, 2025. The person responsible for the planned resources will be Wendy Thompson, Chief Executive Officer (312) 682-6110. Our address is 340 E. 51st St., Chicago, IL 60615.
2022-003
Finding 2023-002 Significant Deficiency in Internal Control Over Reporting Assistance Listing Numbers: 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency : U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency: N/A Award Number/Year: 2023 Criteria FFHC is responsible for preparing and submitting its annual Universal Report and Federal Financial Reports in a timely manner. Condition For AL No. 93.224, Health Center Program and AL 93.527, Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program, we noted that the Universal Data System report and the required annual Federal Financial Reports for the grants within these programs were not submitted by applicable deadlines. Cause FFHC experienced significant turnover of personnel during fiscal years 2021 and 2022 which resulted in a lack of effective transfer of knowledge to new accounting and grant administration personnel. As such, the new personnel were not able to resulted in a significant amount of time needed for the new personnel to get FFHC’s accounting records up to date, resulting in the late completion and submission of the Universal Data System Report and Federal Financial Reports for the grants within these programs.Finding 2023-002 (continued) Effect FFHC was not in compliance with the Reporting requirements for its federally funded programs as prescribed by Uniform Guidance. Questioned Costs None reported. Repeat Finding No. Recommendation We recommend that FFHC enforce its current specific internal control procedures to ensure compliance with applicable federal reporting requirements and ensure that all reports be filed timely in accordance with the federal reporting requirements. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Show full finding ▾Hide full finding ▴Finding 2023-002 Significant Deficiency in Internal Control Over Reporting Assistance Listing Numbers: 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency : U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency: N/A Award Number/Year: 2023 Criteria FFHC is responsible for preparing and submitting its annual Universal Report and Federal Financial Reports in a timely manner. Condition For AL No. 93.224, Health Center Program and AL 93.527, Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program, we noted that the Universal Data System report and the required annual Federal Financial Reports for the grants within these programs were not submitted by applicable deadlines. Cause FFHC experienced significant turnover of personnel during fiscal years 2021 and 2022 which resulted in a lack of effective transfer of knowledge to new accounting and grant administration personnel. As such, the new personnel were not able to resulted in a significant amount of time needed for the new personnel to get FFHC’s accounting records up to date, resulting in the late completion and submission of the Universal Data System Report and Federal Financial Reports for the grants within these programs.Finding 2023-002 (continued) Effect FFHC was not in compliance with the Reporting requirements for its federally funded programs as prescribed by Uniform Guidance. Questioned Costs None reported. Repeat Finding No. Recommendation We recommend that FFHC enforce its current specific internal control procedures to ensure compliance with applicable federal reporting requirements and ensure that all reports be filed timely in accordance with the federal reporting requirements. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Finding 2023-002 Material Weakness in Internal Control Over Reporting Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2023 Criteria FFHC is responsible for preparing and submitting its annual Universal Report and Federal Financial Reports in a timely manner. Views of Responsible Officials and Planned Corrective Actions Friend Family Health Center Inc. and Affiliates (Organization) will implement the following corrective actions for the fiscal year ending June 30, 2023, to remediate the finding and address the cause of the finding. The Organization will implement the following corrective actions for fiscal year 2023 to remediate the finding and address the cause of the finding. The Organization has hired staff with higher technical accounting skills than the previous staff. The following staff have been hired full-time or will be hired soon: Payroll and Benefits Specialist, Grant Accountant, Senior Staff Accountant, Accounts Payables and Receivables Specialist, and a Purchasing Specialist. • The Chief Financial Officer (CFO) will be responsible for the implementation of the corrective action plan and will oversee all related finance activities. • The Organization will document accounting policies and procedures to reflect the new month-end processes and provide training to staff on current and future policies. • The Organization has implemented a new accounting system – Sage Intacct. Additionally, we have implemented a grants project tracking module to better help with grants and contracts reporting and compliance. • All grant-related year-end audit procedures have been transitioned to the Grant Accountant who has experience with financial audits and compliance and reporting for City, State, and Federal grants. • The Organization will ensure that Finance personnel receive a minimum of twenty-five (25) hours of training annually of relevant accounting topics including updates to generally accepted accounting principles, generally accepted government accounting principles, nonprofit and governmental financial reporting, and other related accounting trainings. • The Organization will ensure that any personnel involved in financial reporting have the technical expertise to help with the preparation, review, and analysis of the Federal Financial Reports and the Universal Report. The target date for full implementation of these corrective actions is December 30, 2025. The person responsible for the planned resources will be Raheel Shahzad, Chief Financial Officer (312) 682-6110. Our address is 340 E. 51st St., Chicago, IL 60615.
Finding 2023-003 Material Weakness in Internal Control Over Special Tests and Provisions Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2023Criteria FFHC is responsible for keeping adequate supporting documentation of the calculation of patient service fees for those patients who qualify for discounted fees based on family size and household income. FFHC is also required to apply discounted fees accurately based on an approved sliding fee scale that meets federal compliance requirements. Condition For AL No. 93.224, Health Center Program and AL 93.527, Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program, we were not able to obtain supporting documentation of the family size and household income for nine (9) of forty (40) patients selected for testing. For the remaining thirty-one (31) patients we did not receive enough supporting documentation to recalculate discounted fees in order to determine whether they were in compliance with special tests and provisions for these programs. Cause During fiscal year 2023 sliding scale fees were not properly documented due to the allowance of telehealth visits and limited staff available to collect and maintain proper documentation. Effect FFHC was not in compliance with the Special Tests and Provisions requirements applicable to the Health Center Program and Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program as prescribed by Uniform Guidance. Questioned Costs None reported. Repeat Finding Yes. See Finding 2022-002.Recommendation We recommend that FFHC enforce its current policy and related internal control procedures to ensure compliance with the requirement to provide discounted fees based on federally determined poverty levels for fiscal year 2023. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Show full finding ▾Hide full finding ▴Finding 2023-003 Material Weakness in Internal Control Over Special Tests and Provisions Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2023Criteria FFHC is responsible for keeping adequate supporting documentation of the calculation of patient service fees for those patients who qualify for discounted fees based on family size and household income. FFHC is also required to apply discounted fees accurately based on an approved sliding fee scale that meets federal compliance requirements. Condition For AL No. 93.224, Health Center Program and AL 93.527, Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program, we were not able to obtain supporting documentation of the family size and household income for nine (9) of forty (40) patients selected for testing. For the remaining thirty-one (31) patients we did not receive enough supporting documentation to recalculate discounted fees in order to determine whether they were in compliance with special tests and provisions for these programs. Cause During fiscal year 2023 sliding scale fees were not properly documented due to the allowance of telehealth visits and limited staff available to collect and maintain proper documentation. Effect FFHC was not in compliance with the Special Tests and Provisions requirements applicable to the Health Center Program and Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program as prescribed by Uniform Guidance. Questioned Costs None reported. Repeat Finding Yes. See Finding 2022-002.Recommendation We recommend that FFHC enforce its current policy and related internal control procedures to ensure compliance with the requirement to provide discounted fees based on federally determined poverty levels for fiscal year 2023. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Finding 2023-003 Material Weakness in Internal Control Over Special Tests and Provisions Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2023 Criteria FFHC is responsible for keeping adequate supporting documentation of the calculation of patient service fees for those patients who qualify for discounted fees based on family size and household income. FFHC is also required to apply discounted fees accurately based on an approved sliding fee scale that meets federal compliance requirements. Views of Responsible Officials and Planned Corrective Actions Friend Family Health Center Inc. and Affiliates (Organization) will implement the following corrective actions for the fiscal year ending June 30, 2023, to remediate the finding and address the cause of the finding. The Organization will implement the following corrective actions for fiscal year 2023 to remediate the finding and address the cause of the finding. • The Chief Financial Officer (CFO) will be responsible for the implementation of the corrective action plan and will oversee all related finance activities. • FFHC will enforce its current policy and related internal control procedures to ensure that supporting documentation of family size and household income is maintained for all patients that receive discounted patient service fees in relation to the Health Centers Program and Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program. • FFHC will enforce its current policy and related internal control procedures to ensure that discounted patient service fees are properly calculated and charged based on the applicable approved sliding fee scale. The target date for full implementation of these corrective actions is December 30, 2025. The person responsible for the planned resources will be Raheel Shahzad, Chief Financial Officer (847) 957-6244. Our address is 340 E. 51st St., Chicago, IL 60615.
2022-002
FAC accepted this audit on October 22, 2024 — management decision was due April 22, 2025.
Finding 2022-002 Material Weakness in Internal Control Over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2022 Criteria The Organization is responsible for keeping adequate supporting documentation of its compliance with applicable federal compliance requirements including for expenditures charged to federally funded grants and sliding scale fees charged to patients. Condition For AL No. 93.224, Health Center Program and AL 93.527, Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program (the federal programs), a sample of forty (40) payroll transactions were tested for Activities Allowed or Unallowed and Allowable Costs/Cost Principles. During the testing of payroll transactions, there were no instances for which the Organization was able to provide approved timesheets or timecards documenting hours worked and charged to the grants within the federal programs. There were no instances in which the Organization was able to provide documentation of review and approval of payroll journal entries for the payroll charges to the grants within the federal programs. For the federal programs, during our testing of Special Tests and Provisions, we tested sliding scale fees, for which we were unable to obtain support for patient poverty levels due to patients being allowed to self-certify their income without documentation. It was also noted that one person prepared, reviewed and submitted all vouchers and reports which is an indication of improper segregation of duties. Cause The Organization experienced significant turnover of personnel during fiscal years 2021 and 2022 which resulted in a lack of effective transfer of knowledge to new accounting and grant administration personnel so that they would know where appropriate documentation of financial transactions was stored so that it could be readily available when required. Sliding scale fees were not properly documented due to the allowance of telehealth visits and limited staff available to collect and maintain proper documentation while restrictions were in place during the COVID-19 pandemic. Effect The Organization was not in compliance with the Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Special Tests and Provisions requirements of its grant agreements within its federally funded programs as prescribed by Uniform Guidance. Questioned Costs See scope limitation. Repeat Finding Yes. See Findings 2021-003 and 2021-004 in the summary schedule of prior audit findings. Recommendation We recommend that the Organization implement the following corrective actions: • Enforce its current specific internal control procedures to ensure compliance with applicable federal regulations. • Require that all personnel files have authorization and approval of current pay rates along with correspondence regarding to which grant an employee’s salary and fringe benefits should be expensed including any allocations if the employee worked on several grants. • Require that all expenses have proper invoices with approvals and should be organized within the Organization’s office. • Require that vouchers have all related invoices attached to them and be reconciled with monthly, quarterly and close-out financial reports. • Require that all vouchers and reports be prepared by one individual and independently reviewed and approved by a second individual prior to submission. There should be documentation of the review such as a sign-off or initials. • Require that all vouchers and reports should be filed timely in accordance with the various grant agreements. • Require that correspondence be received from those agencies indicating that required reports per the written grant agreements are not necessary when applicable. • Ensure that the data collection form is filed the earlier of thirty (30) days after the report date or no later than nine months after the fiscal year-end. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Show full finding ▾Hide full finding ▴Finding 2022-002 Material Weakness in Internal Control Over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2022 Criteria The Organization is responsible for keeping adequate supporting documentation of its compliance with applicable federal compliance requirements including for expenditures charged to federally funded grants and sliding scale fees charged to patients. Condition For AL No. 93.224, Health Center Program and AL 93.527, Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program (the federal programs), a sample of forty (40) payroll transactions were tested for Activities Allowed or Unallowed and Allowable Costs/Cost Principles. During the testing of payroll transactions, there were no instances for which the Organization was able to provide approved timesheets or timecards documenting hours worked and charged to the grants within the federal programs. There were no instances in which the Organization was able to provide documentation of review and approval of payroll journal entries for the payroll charges to the grants within the federal programs. For the federal programs, during our testing of Special Tests and Provisions, we tested sliding scale fees, for which we were unable to obtain support for patient poverty levels due to patients being allowed to self-certify their income without documentation. It was also noted that one person prepared, reviewed and submitted all vouchers and reports which is an indication of improper segregation of duties. Cause The Organization experienced significant turnover of personnel during fiscal years 2021 and 2022 which resulted in a lack of effective transfer of knowledge to new accounting and grant administration personnel so that they would know where appropriate documentation of financial transactions was stored so that it could be readily available when required. Sliding scale fees were not properly documented due to the allowance of telehealth visits and limited staff available to collect and maintain proper documentation while restrictions were in place during the COVID-19 pandemic. Effect The Organization was not in compliance with the Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Special Tests and Provisions requirements of its grant agreements within its federally funded programs as prescribed by Uniform Guidance. Questioned Costs See scope limitation. Repeat Finding Yes. See Findings 2021-003 and 2021-004 in the summary schedule of prior audit findings. Recommendation We recommend that the Organization implement the following corrective actions: • Enforce its current specific internal control procedures to ensure compliance with applicable federal regulations. • Require that all personnel files have authorization and approval of current pay rates along with correspondence regarding to which grant an employee’s salary and fringe benefits should be expensed including any allocations if the employee worked on several grants. • Require that all expenses have proper invoices with approvals and should be organized within the Organization’s office. • Require that vouchers have all related invoices attached to them and be reconciled with monthly, quarterly and close-out financial reports. • Require that all vouchers and reports be prepared by one individual and independently reviewed and approved by a second individual prior to submission. There should be documentation of the review such as a sign-off or initials. • Require that all vouchers and reports should be filed timely in accordance with the various grant agreements. • Require that correspondence be received from those agencies indicating that required reports per the written grant agreements are not necessary when applicable. • Ensure that the data collection form is filed the earlier of thirty (30) days after the report date or no later than nine months after the fiscal year-end. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
The Organization will implement the following corrective actions for the fiscal year ending June 30, 2022 to remediate the finding and address the cause of the finding. The Organization will implement the following corrective actions for fiscal year 2023 to remediate the finding and address the cause of the finding. The Organization has hired staff with higher technical accounting skills than the previous staff. The following staff have been hired full-time or will be hired soon: Payroll and Benefits Specialist, Grant Accountant, Senior Staff Accountant, Accounts Payables and Receivables Specialist, and a Purchasing Specialist. • The Chief Financial Officer (CFO) will be responsible for the implementation of the corrective action plan, and will oversee all related finance activities. • The Organization will document accounting policies and procedures to reflect the new month-end processes and provide training to staff on current and future policies. • The Organization has implemented procedures for staff accountants to prepare balance sheet reconciliations monthly with a monthly review performed by the CFO. All balance sheet accounts are reconciled to external data for verification on a monthly basis. All revenue accounts will be reconciled to external data for verification on a monthly basis. • The Organization has implemented a new accounting system – Sage Intacct. Additionally, we have implemented a grants project tracking module to better help with grants and contracts reporting and compliance. • The Organization has implemented a month-end checklist for all monthly entries to be completed by assigned finance personnel. We are ensuring that all staff are trained adequately to handle any assigned task. All monthly entries are required to be reviewed and approved by the CFO prior to posting to the general ledger within our new accounting software. All appropriate backup documentation will be saved and stored within the accounting software. • All grant related year-end audit procedures have been transitioned to the Grant Accountant who has experience with financial audits and compliance and reporting for City, State, and Federal grants. • The Organization will ensure that Finance personnel receive a minimum of twenty-five (25) hours of training annually of relevant accounting topics including updates to generally accepted accounting principles, generally accepted government accounting principles, nonprofit and governmental financial reporting, and other related accounting trainings. • The Organization will ensure that any personnel involved in financial reporting have the technical expertise to help with the preparation, review, and analysis of the financial statements and supplementary information.
2021-003, 2021-004
Finding 2022-003 Noncompliance with Federal and State Reporting Requirements Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2022 Criteria Uniform Guidance requires that single audits be completed, and the reporting package submitted to the Federal Audit Clearinghouse within the earlier of thirty (30) calendar days after receipt of the auditor’s report or nine (9) months after the end of the audit period. Condition The Organization did not submit its audited financial statements and SEFA to the Federal Audit Clearinghouse website within nine (9) months of June 30, 2022. The Organization also didn’t submit its audited financial statements, SEFA, CYEFR and other required information to the GATA portal within six (6) months after June 30, 2022. This is a repeat finding (see Finding 2022-003 in the Summary of Prior Audit Findings). Cause This condition was due to the Organization being understaffed within its accounting and finance department resulting in a significant delay in completing the recording of financial transactions, performing account reconciliations and preparing financial reports available for audit. Effect The effect is that controls over the financial reporting process were weakened thereby increasing the risk that material misstatements could be included in the financial statements without management being aware. Additionally, noncompliance with financial reporting deadlines could cause funding sources for the Organization to delay providing funding for the current fiscal year. Questioned Costs None noted. Recommendation We recommend that management hire personnel within its accounting and finance department so that all defined tasks can be performed in a more timely manner and evaluate its current processes to determine how to make them more efficient so that the current personnel within the accounting and finance department are able to complete their tasks in a more timely manner. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Show full finding ▾Hide full finding ▴Finding 2022-003 Noncompliance with Federal and State Reporting Requirements Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2022 Criteria Uniform Guidance requires that single audits be completed, and the reporting package submitted to the Federal Audit Clearinghouse within the earlier of thirty (30) calendar days after receipt of the auditor’s report or nine (9) months after the end of the audit period. Condition The Organization did not submit its audited financial statements and SEFA to the Federal Audit Clearinghouse website within nine (9) months of June 30, 2022. The Organization also didn’t submit its audited financial statements, SEFA, CYEFR and other required information to the GATA portal within six (6) months after June 30, 2022. This is a repeat finding (see Finding 2022-003 in the Summary of Prior Audit Findings). Cause This condition was due to the Organization being understaffed within its accounting and finance department resulting in a significant delay in completing the recording of financial transactions, performing account reconciliations and preparing financial reports available for audit. Effect The effect is that controls over the financial reporting process were weakened thereby increasing the risk that material misstatements could be included in the financial statements without management being aware. Additionally, noncompliance with financial reporting deadlines could cause funding sources for the Organization to delay providing funding for the current fiscal year. Questioned Costs None noted. Recommendation We recommend that management hire personnel within its accounting and finance department so that all defined tasks can be performed in a more timely manner and evaluate its current processes to determine how to make them more efficient so that the current personnel within the accounting and finance department are able to complete their tasks in a more timely manner. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
The Organization will implement the following corrective actions for the fiscal year ending June 30, 2022 to remediate the finding and address the cause of the finding. The Organization will implement the following corrective actions for fiscal year 2023 to remediate the finding and address the cause of the finding. The Organization has hired staff with higher technical accounting skills than the previous staff. The following staff have been hired full-time or will be hired soon: Payroll and Benefits Specialist, Grant Accountant, Senior Staff Accountant, Accounts Payables and Receivables Specialist, and a Purchasing Specialist. • The Chief Financial Officer (CFO) will be responsible for the implementation of the corrective action plan, and will oversee all related finance activities. • The Organization will document accounting policies and procedures to reflect the new month-end processes and provide training to staff on current and future policies. • The Organization has implemented procedures for staff accountants to prepare balance sheet reconciliations monthly with a monthly review performed by the CFO. All balance sheet accounts are reconciled to external data for verification on a monthly basis. All revenue accounts will be reconciled to external data for verification on a monthly basis. • The Organization has implemented a new accounting system – Sage Intacct. Additionally, we have implemented a grants project tracking module to better help with grants and contracts reporting and compliance. • The Organization has implemented a month-end checklist for all monthly entries to be completed by assigned finance personnel. We are ensuring that all staff are trained adequately to handle any assigned task. All monthly entries are required to be reviewed and approved by the CFO prior to posting to the general ledger within our new accounting software. All appropriate backup documentation will be saved and stored within the accounting software. • All grant related year-end audit procedures have been transitioned to the Grant Accountant who has experience with financial audits and compliance and reporting for City, State, and Federal grants. • The Organization will ensure that Finance personnel receive a minimum of twenty-five (25) hours of training annually of relevant accounting topics including updates to generally accepted accounting principles, generally accepted government accounting principles, nonprofit and governmental financial reporting, and other related accounting trainings. • The Organization will ensure that any personnel involved in financial reporting have the technical expertise to help with the preparation, review, and analysis of the financial statements and supplementary information.
2021-003
FAC accepted this audit on February 8, 2024 — management decision was due August 8, 2024.
Material Weakness in Internal Control Over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance, Reporting, and Special Tests U.S. Department of Health and Human Services, CFDA No. 93.224 and No. 93.527, Health Center Program Cluster Criteria Friend Health and Affiliates (Friend Health) is responsible for keeping an accurate accounting and all of the required documentation in accordance with applicable federal regulations. Condition For AL number 93.224 and 93.527, Health Center Program, we chose a sample size of 53 payroll and 7 expense items to test for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. During our payroll testing, we noted eight instances where Friend Health was not able to provide support and approval for the pay rate in an employees’ personnel file. Friend Health was not able to provide an indication as to which grant the employees’ salary and fringe benefits should be charged for any of our selected sample. We noted we were unable to verify a review and approval of the monthly payroll journal entries. For fourteen individuals, we were not able to verify the percent of his or her salary that should be charged to the grant. For twelve individuals, additional amounts were added to the payroll for retro pay or other adjustments that could not be traced to documentation. For Cash Management, we noted that no evidence was able to be provided for certifications of monthly pull downs. For period of performance, we noted four instances in our testing of July 2020 and June 2021 payroll in which the employee received retro pay or other pay without proper documentation, thus we were unable to determine that the period of performance was correct. For Reporting, one of our five reports selected for testing was not submitted timely. We were also unable to obtain verification of the date of submission for two of those reports. All selected reports were prepared, reviewed, and submitted by one individual with no review of another individual. In addition, we were unable to verify certain information on one of the reports. During our testing of sliding scale fees, for many instances we were unable to obtain support for patients’ poverty levels as during the Coronavirus 19 pandemic, individuals were generally self-certifying their income, or not bringing any verification of income to their appointments. There were several telehealth encounters, as well. In many cases, the price determined according to the sliding fee schedule was not collected. We chose a sample of 60, however, after testing 25, it was determined Friend Health was not in compliance and no additional testing was necessary. The data collection form for June 30, 2019 was not submitted timely in that it was submitted on May 13 2020 when it was due on January 17 2020. since the report date was December 18 2019. There was no extension requested or granted for the late submission. Cause Friend Health did not follow its established policies and procedures which resulted in there being a lack of appropriate documentation for its compliance with applicable federal regulations. Effect Friend Health is not in compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance, Reporting, and Special Tests requirements of the grant agreement and OMB Uniform Guidance. Questioned Costs See scope limitation. Repeat Finding No. Recommendation We recommend that Friend Health implement the following: Enforce its current specific internal control procedures to ensure compliance with applicable federal regulations. All personnel files have authorization and approval of pay rates along with correspondence regarding to which grant an employees’ salary and fringe benefits should be expensed. Documentation for adjustments to pay each payroll should be kept. Documentation of the preparation and review of journal entries for payroll should be kept. All documentation for reports should be made accessible and kept so that it can reconcile to various reports sent to granting agencies. Reporting schedules be maintained for timely filing and one individual prepare while a separate individual review. Proper support is retained to support patient poverty levels and collections are held to determined rates outlined by the sliding scale fee schedule. The data collection form be filed the earlier of thirty days after the report date or no later than nine months after the fiscal year-end. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Show full finding ▾Hide full finding ▴Material Weakness in Internal Control Over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance, Reporting, and Special Tests U.S. Department of Health and Human Services, CFDA No. 93.224 and No. 93.527, Health Center Program Cluster Criteria Friend Health and Affiliates (Friend Health) is responsible for keeping an accurate accounting and all of the required documentation in accordance with applicable federal regulations. Condition For AL number 93.224 and 93.527, Health Center Program, we chose a sample size of 53 payroll and 7 expense items to test for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. During our payroll testing, we noted eight instances where Friend Health was not able to provide support and approval for the pay rate in an employees’ personnel file. Friend Health was not able to provide an indication as to which grant the employees’ salary and fringe benefits should be charged for any of our selected sample. We noted we were unable to verify a review and approval of the monthly payroll journal entries. For fourteen individuals, we were not able to verify the percent of his or her salary that should be charged to the grant. For twelve individuals, additional amounts were added to the payroll for retro pay or other adjustments that could not be traced to documentation. For Cash Management, we noted that no evidence was able to be provided for certifications of monthly pull downs. For period of performance, we noted four instances in our testing of July 2020 and June 2021 payroll in which the employee received retro pay or other pay without proper documentation, thus we were unable to determine that the period of performance was correct. For Reporting, one of our five reports selected for testing was not submitted timely. We were also unable to obtain verification of the date of submission for two of those reports. All selected reports were prepared, reviewed, and submitted by one individual with no review of another individual. In addition, we were unable to verify certain information on one of the reports. During our testing of sliding scale fees, for many instances we were unable to obtain support for patients’ poverty levels as during the Coronavirus 19 pandemic, individuals were generally self-certifying their income, or not bringing any verification of income to their appointments. There were several telehealth encounters, as well. In many cases, the price determined according to the sliding fee schedule was not collected. We chose a sample of 60, however, after testing 25, it was determined Friend Health was not in compliance and no additional testing was necessary. The data collection form for June 30, 2019 was not submitted timely in that it was submitted on May 13 2020 when it was due on January 17 2020. since the report date was December 18 2019. There was no extension requested or granted for the late submission. Cause Friend Health did not follow its established policies and procedures which resulted in there being a lack of appropriate documentation for its compliance with applicable federal regulations. Effect Friend Health is not in compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance, Reporting, and Special Tests requirements of the grant agreement and OMB Uniform Guidance. Questioned Costs See scope limitation. Repeat Finding No. Recommendation We recommend that Friend Health implement the following: Enforce its current specific internal control procedures to ensure compliance with applicable federal regulations. All personnel files have authorization and approval of pay rates along with correspondence regarding to which grant an employees’ salary and fringe benefits should be expensed. Documentation for adjustments to pay each payroll should be kept. Documentation of the preparation and review of journal entries for payroll should be kept. All documentation for reports should be made accessible and kept so that it can reconcile to various reports sent to granting agencies. Reporting schedules be maintained for timely filing and one individual prepare while a separate individual review. Proper support is retained to support patient poverty levels and collections are held to determined rates outlined by the sliding scale fee schedule. The data collection form be filed the earlier of thirty days after the report date or no later than nine months after the fiscal year-end. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Friend Health has implemented quarterly audits on all new staff to verify each new staff member hired within the last year has a signed employee offer and appropriate backup support to support the employees’ annual salary. Friend Health has implemented a new accounting system Sage Intacct. Additionally, we have implemented a grants project tracking module to better help with grants and contracts reporting and compliance. Friend Health is in the process of implementing a new payroll & HRIS – UKG. The anticipated completion date is June 2024. All manual and onboarding processes will be implemented within the system for tracking and auditing purposes. Friend Health will implement an established monthend checklist for all monthly entries to be completed by assigned finance staff. We will ensure that all staff are trained adequately to handle any assigned task. All monthly entries are required reviewed and approved by the Chief Financial Officer or Controller prior to posting to the general ledger within our new Accounting Software. All appropriate backup documentation will be saved and stored within the accounting software. All Grant related Year-End and Audit Procedures will be transitioned to the Grant Accountant who has experience in audits, compliance, and reporting of City, State, Local, and Federal Grants. These will be reviewed by Controller and/or Chief Financial Officer. Friend Health will document accounting policies and procedures to reflect the new month-end processes and provide training to staff on current and future policies. Friend Health will ensure that Finance staff will receive at minimum of 25 hours of training each year related to FASB, GAAP, Governmental Financial Reporting, Compliance Requirements, and other related accounting trainings annually. Friend Health will ensure that any staff involved in Financial Reporting that the technical expertise to help with the preparation, review, and analysis of the financial statements.
Material Weakness in Internal Control Over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance, Reporting, and Special Tests U.S. Department of Health and Human Services, CFDA No. 93.224 and No. 93.527, Health Center Program Cluster for the federal award program as it impacted the internal controls over compliance of the federal awards and much of the funds Friend Health receives are from a federal agency.
Show full finding ▾Hide full finding ▴Material Weakness in Internal Control Over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance, Reporting, and Special Tests U.S. Department of Health and Human Services, CFDA No. 93.224 and No. 93.527, Health Center Program Cluster for the federal award program as it impacted the internal controls over compliance of the federal awards and much of the funds Friend Health receives are from a federal agency.
As part of the system of internal control over wire transfers, there will be segregation of duties with one person initiating the wire transfer and a second person reviewing and approving the wire transfer. A third person should then prepare timely bank reconciliations to reconcile all wire transfers. This would ensure that all wire transfers were proper and being sent to known vendors of Friend Health.
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