Canoncito Band of Navajos Health Center, Inc

2023-003 — Late Audit Report Federal program information: Funding agency: All Title: All ALN: All Award period: Various Criteria: According to 2 CFR Part 200.512, the annual single audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period (June 30, 2024). Condition: CBNHC’s fiscal year 2023 single audit reporting package was not submitted by the due date of June 30, 2024. Context: N/A Questioned Costs: None Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which caused significant delays in completion of the year-end reconciliations of the financial statements and the schedule of expenditures of federal awards. Effect: CBNHC was unable to completely reconcile certain general ledger accounts timely, which resulted in significant audit adjustments. As a result, the audit started late and was not issued within the reporting deadline. Auditor’s Recommendations: The Accounting department should be analyzed, and functions/duties re-assigned and/or additional personnel hired to ensure that monthly and annual account reconciliations are performed timely to ensure that the data collection form and reporting package are submitted by the due date. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. In the first quarter of fiscal year 2023, CBNHC made progress towards catching up with its financial audits for fiscal years 2021 and 2022. However, key personnel were administratively unavailable during the last quarter of 2023, causing CBNHC to fall further behind in its financials.

2023-004 — Reporting Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2022 – 9/30/2023 Criteria: The Annual Funding Agreement (AFA) with I.H.S. requires CBNHC to submit Federal Financial Reports (SF-425) within 30 days after the close of each quarter, except for the fourth quarter, which will be submitted within 90 days after the close of the federal fiscal year. Additionally, a brief annual narrative report will also be submitted within 90 days after the close of the federal fiscal year. Condition: The quarterly SF-425 reports for all quarters of fiscal year 2023 were not prepared or submitted to I.H.S. Context: All four quarterly SF-425 reports for the Indian Self-Determination program. Questioned Costs: None. Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which impacted the preparation and submission of required reports. Effect: CBNHC is not in compliance with reporting requirements for the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should develop internal controls to ensure all program reports are properly completed and submitted by the required due dates. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. In the first quarter of fiscal year 2023, CBNHC made progress towards catching up with the reconciliation of its financials so that it could properly produce the SF-425 reports. However key personnel were administratively unavailable during the last quarter of 2023, causing CBNHC to fall further behind in its financials rendering CBNHC to be unable to produce the SF-425 report on time.

2023-005 — Equipment and Real Property Management Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2022 – 9/30/2023 Criteria: 2 CFR section 200.313 requires that (1) equipment be used in the program or project for which it was acquired as long as needed, (2) property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, and cost of the property, and (3) a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Additionally, CBNHC’s Financial Policies and Procedures require a physical inventory of property be taken annually and reconciled to the general ledger. Condition: CBNHC has not completed a physical inventory of property and equipment in the last two years. Context: N/A Questioned Costs: None. Cause: CBNHC was significantly impacted by the COVID-19 pandemic. Additionally, CBNHC is not implementing their Financial Policies and Procedures to ensure that a physical inventory has been taken annually and reconciled to the general ledger. Effect: CBNHC is not in compliance with equipment and real property management requirements for the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should implement its Financial Policies and Procedures and plan a physical inventory of its property as quickly as possible. The results of the physical inventory should be reconciled to the general ledger. Management’s Response: CBNHC did not have the adequate financial or administrative staff to perform a physical inventory and therefore has not been keeping with its Financial Policies and Procedures and performing an annual physical inventory.

2023-006 — Procurement Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2022 – 9/30/2023 Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. This includes oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. Further, according to the CBNHC Finance Policies and Procedures, the Board of Directors shall approve all purchases over $5,000. Condition: For one vendor paid over $5,000 during fiscal year 2023, there was no evidence that selection and use of this vendor was approved by the Board of Directors. For one additional contractor, CBNHC did not have an active contract in place with the contractor. Context: Two of 35 nonpayroll transactions tested. Questioned Costs: None. Cause: CBNHC is not implementing their Financial Policies and Procedures to ensure that the selection and use of all vendors and contractors are properly documented and approved according to purchase authority levels. Effect: CBNHC is not in compliance with procurement requirements for the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should implement its Financial Policies and Procedures to ensure that the selection and use of all vendors and contractors are properly documented and approved. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. During this period, two key leadership members were administratively unavailable to support the proper procurement of vendor contract renewals. The purchases were made outside the CBNHC procurement policies unbeknownst to CBNHC leadership.

2023-007 — Allowable Costs Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2022 – 9/30/2023 Criteria: CBNHC was awarded funding under its Master Contract and AFA under the State and Local Fiscal Recovery Funds (SLFRF). One allowable use of funds under the SLFRF Final Rule is for premium pay to essential workers. Premium pay is designed to compensate workers that, by virtue of their employment, were forced to take on additional burdens and make great personal sacrifices as a result of the COVID–19 pandemic. The SLFRF Final Rule defines eligible workers as ‘‘those workers needed to maintain continuity of operations of essential critical infrastructure sectors and additional sectors as each government may designate as critical to protect the health and wellbeing of residents”. Condition: In November 2022, all employees and Board members of CBNHC received premium pay based on months of service during fiscal year 2022. However, Board members do not appear to meet the definition of an “essential worker” as defined under the SLFRF Final Rule. Context: N/A Questioned Costs: $10,416. Cause: CBNHC Board of Directors approved premium pay to all employees, IPA/MOA contractor employees, and Board members regardless of whether each position was needed to maintain continuity of operations. Effect: CBNHC is not in compliance with the SLFRF Final Rule related to this funding under the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should evaluate the SLFRF Final Rule and determine whether Board members meet the definition of an “essential worker”. CBNHC should consider requesting reimbursement of these funds from Board members if it is determined that Board members do not meet the definition of an “essential worker” under the SLFRF Final Rule. Management’s Response: CBNHC acknowledges that its Board members did not meet the definition of an “essential worker” and therefore, is not in compliance with the SLFRF Final Rule related to the relief funding under the Indian Self-Determination program.

2021-004 — Late Audit Report Federal program information: Funding agency: All Title: All ALN: All Award period: Various Criteria: According to 2 CFR Part 200.512, the annual single audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period (June 30, 2022). Condition: CBNHC’s fiscal year 2021 single audit reporting package was not submitted by the due date of June 30, 2022. Context: N/A Questioned Costs: None Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which caused significant delays in completion of the year-end reconciliations of the financial statements and the schedule of expenditures of federal awards. Effect: CBNHC was unable to completely reconcile certain general ledger accounts timely, which resulted in significant audit adjustments. As a result, the audit started late and was not issued within the reporting deadline. Auditor’s Recommendations: The Accounting department should be analyzed, and functions/duties re-assigned and/or additional personnel hired to ensure that monthly and annual account reconciliations are performed timely to ensure that the data collection form and reporting package are submitted by the due date. Management’s Response: As documented in response to finding 2021-001, a timeline was produced to demonstrate that CBNHC was extremely short-staffed, which caused it to fall behind in its accounting functions. CBNHC continued to experience operational disruptions caused by turnover of key administrative positions and the COVID-19 pandemic. The reconciliation of the general ledger and closing of the financials fell behind. CBNHC subsequently relied on an accounting consultant to assist in reconciling its books and preparing its financial statements. However, there were limitations in CBNHC’s ability to reconcile its specialized medical insurance billings and PRC program expenditures due to lack of knowledge of the health care management system, namely the Resource Patient Management System (RPMS). CBNHC has since hired RPMS experienced personnel and is current in managing the monthly close of the patient financial system. CBNHC will continue with a late audit report finding for fiscal year 2022, with the goal of being on track for its fiscal year 2023 reporting.

2021-005 — Reporting Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2020 – 9/30/2021 Criteria: The Annual Funding Agreement (AFA) with I.H.S. requires CBNHC to submit Federal Financial Reports (SF-425) within 30 days after the close of each quarter, except for the fourth quarter, which will be submitted within 90 days after the close of the federal fiscal year. Additionally, a brief annual narrative report will also be submitted within 90 days after the close of the federal fiscal year. Condition: The quarterly SF-425 reports for all quarters of fiscal year 2021 were not prepared or submitted to I.H.S. Additionally, the annual narrative report was not prepared or submitted for fiscal year 2021. Context: All four quarterly SF-425 reports and the annual narrative report for the Indian Self-Determination program. Questioned Costs: None Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which impacted the preparation and submission of required reports. Effect: CBNHC is not in compliance with reporting requirements for the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should develop internal controls to ensure all program reports are properly completed and submitted by the required due dates. Management’s Response: CBNHC continued to experience operational disruptions caused by turnover of key administrative positions and the COVID-19 pandemic. In addition to staff shortages, CBNHC’s priority was on emergency response to the To’Hajiilee community. These events caused CBNHC to fall behind in maintaining its financials and other administrative tasks. The SF-425 and narrative reporting as required under the I.H.S. Annual Funding Agreement were not submitted. CBNHC takes seriously its contractual obligations and is actively working toward compliance in its reporting requirements.

2021-006 — Special Tests and Provisions – Background Checks Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2020 – 9/30/2021 Criteria: The AFA with I.H.S. requires CBNHC to conduct fingerprinting and background checks of employees, contractors, and patient care providers as required by applicable law (including 25 U.S.C. Section 3207 and 1647 (a)(b) and 42 C.F.R. Sections 136.401 to 136.418) and in accordance with the policies and procedures of CBNHC. Condition: CBNHC did not maintain records of the start/hire date, fingerprint charts, completed background check, and the suitability determination/adjudication for one employee. For one other employee, the suitability determination/adjudication was not completed until almost five years after their hire date (although the background check was completed within three months of their hire date). Context: Two of six employees tested for the Indian Self-Determination program. Questioned Costs: None Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which caused turnover in the Human Resources department at CBNHC. Effect: CBNHC is not in compliance with background check requirements for the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should implement its policies and procedures regarding background checks to ensure that all employees and contractors are subject to fingerprinting and background checks. Management’s Response: CBNHC experienced substantial staffing shortages and struggled with the impacts of the COVID-19 pandemic throughout fiscal year 2021. During this time, CBNHC continued with its recruiting of staff to carry out the human resource duties and responsibilities required for regulatory compliance; however, continued management vacancies and COVID-19 severely impacted its ability to obtain necessary human resources and other key staff. The Controller continued in the role of Acting CEO for the first half of fiscal year 2021 and formally assumed the CEO position as of March 18, 2021. The Acting CEO remained responsible for operations of the organization, the Finance Department, and Human Resources during this time. The Human Resources Director position was vacant throughout most of fiscal year 2021 and was finally filled in August 2021. The recruiting challenges and continued effects of the pandemic left CBNHC leadership severely short-staffed, causing significant delays in processing required background checks. The status of the approved Human Resources and associated administrative positions and their status at the close of fiscal year 2021 is summarized as follows: • Chief Executive Officer (Position Status: Vacant from June 11, 2020 – March 18, 2021) – Responsible for providing administrative oversight for all aspects of the efficient operations of CNBHC and serves as the administrative authority for the organization and its health programs. Interim CEO duties were assigned to the Controller, who formally accepted the position in March 2021. • Controller (Position Status: Vacant from March 18, 2021 – September 30, 2021) – Responsible for management, oversight, and administration of the CBNHC accounting, finance, payroll and tax functions, advises executive leadership on financial management and strategic planning; develops, modifies and enforces financial accounting safeguards. The Acting CEO was serving as Acting Controller. The Controller was appointed Acting CEO in February 2020 and formally accepted the position in March 2021. • Human Resource Director (Position Status: Vacant from October 1, 2020 – August 30, 2021) – Guides and manages the overall provision of Human Resources services, policies, and benefit programs for CBNHC. The Human Resources Director will assist in confirming payroll set-up, including rates and deductions, and will participate in reviewing benefit invoices to ensure accuracy. As noted above, the Human Resources Director (previously Manager) was vacant for most of fiscal year 2021, with the Controller maintaining responsibilities of the CEO, Controller, and Human Resources Director. Additionally, vendors that process and finalize CBNHC background checks experienced severe backlogs due to delays across the nation’s court systems in the aftermath of the pandemic and associated shutdowns. These delays contributed to further delays in CBNHC receiving adjudication and background results.

2021-007 — Equipment and Real Property Management Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2020 – 9/30/2021 Criteria: 2 CFR section 200.313 requires that (1) equipment be used in the program or project for which it was acquired as long as needed, (2) property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, and cost of the property, and (3) a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Additionally, CBNHC’s Financial Policies and Procedures require a physical inventory of property be taken annually and reconciled to the general ledger. Condition: CBNHC has not completed a physical inventory of property and equipment in the last two years. Context: N/A Questioned Costs: None Cause: CBNHC was significantly impacted by the COVID-19 pandemic. Additionally, CBNHC is not implementing their Financial Policies and Procedures to ensure that a physical inventory has been taken annually and reconciled to the general ledger. Effect: CBNHC is not in compliance with equipment and real property management requirements for the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should implement its Financial Policies and Procedures and plan a physical inventory of its property as quickly as possible. The results of the physical inventory should be reconciled to the general ledger. Management’s Response: CBNHC did not have the adequate financial or administrative staff to perform a physical inventory and therefore has not been keeping with its Financial Policies and Procedures and performing an annual physical inventory.

Federal program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination CFDA number: 93.441 Award period: October 1, 2018 ? September 30, 2019 Criteria: According to the Corporation?s Annual Funding Agreement (AFA), the Corporation will follow the IHS Contract Health Services (CHS)/Purchased and Referred Care (PRC) eligibility requirements prescribed in 42 CFR Part 136, Subpart C, and additional residency requirements specific to the CBN tribal community. Individuals seeking PRC financial assistance must maintain his/her residence within the Ca?oncito Indian reservation boundaries. Proof of residency will be required of the patient (e.g. rental agreement, utility bill, voter registration, etc.). Condition: One of ten patients tested receiving PRC financial assistance did not maintain residence within the Ca?oncito Indian reservation boundaries. Context: One of ten patients tested receiving PRC financial assistance. Questioned Costs: None Cause: The Corporation is following IHS regulations regarding eligibility of patients for PRC financial assistance under 42 CFR Part 136, Subpart C. However, the Corporation?s AFA is more stringent than these regulations and the Corporation was unaware of this. Effect: The Corporation is not in compliance with the eligibility requirements of its AFA regarding PRC financial assistance. Auditor?s Recommendations: The Corporation should enforce the more stringent requirements regarding PRC financial assistance in its AFA. Alternatively, the Corporation could work with IHS in its next AFA negotiation to only require the Corporation to follow the requirements under 42 CFR Part 136, Subpart C. Management?s Response: The Corporation experienced employee turnover in its Purchased/Referred Care (PRC) program in fiscal year 2019. The result left the Corporation without a Care Coordinator for three (3) months. A new Care Coordinator was onboarded in June 2019. The Administrative Officials administered the program based on the Corporation?s approved policies (Policy Code: PRC 100), which specifically states ?Eligibility for services is limited to those individuals who are enrolled members of the Canoncito Band of Navajos who reside within Bernalillo, Sandoval, and Cibola counties in New Mexico; which comprises the Corporation?s Contract Health Service Delivery Area (CHSDA).? Therefore, the PRC Care Coordinator qualified a patient (with residence in Albuquerque) as eligible for payment of health care services for a priority referral issued by the Corporation?s health care provider. The Corporation was not aware of the conflict between its approved policies and the ?patient eligibility? definition contained in the Annual Funding Agreement (AFA) with the Indian Health Service.

Federal program information: Funding agency: All Title: All CFDA number: All Award period: Various Criteria: According to 2 CFR Part 200.512, the annual single audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period (June 30, 2020). The Corporation was automatically granted a six-month extension on this due date to December 31, 2020. Condition: The Corporation?s fiscal year 2019 single audit reporting package was not submitted within the extended due date of December 31, 2020. Context: N/A Questioned Costs: None Cause: The Corporation was significantly impacted by the COVID-19 pandemic, which caused significant delays in completion of the year-end reconciliations of the financial statements and the schedule of expenditures of federal awards. Effect: The Corporation was unable to completely reconcile certain general ledger accounts timely, which resulted in significant audit adjustments. As a result, the audit started late and was not issued within the extended reporting deadline. Auditor?s Recommendations: The accounting department should be analyzed, and functions/duties re-assigned and/or additional personnel hired to ensure that monthly and annual account reconciliations are performed timely to ensure that the data collection form and reporting package are submitted by the due date. Management?s Response: As documented in response to finding 2019-001, the Corporation was short-staffed and was behind in its accounting records. As the Corporation started making progress in its hiring efforts in fiscal year 2020, the Corporation experienced further operational disruptions with the turnover of key administrative positions and the COVID-19 pandemic. The Corporation?s Health Board had delegated the Controller as the Acting Chief Executive Officer. The primary focus during this time was devoted to COVID-19 emergency response and the accounting duties and functions were refocused on essential operations as payroll and accounts payable. The reconciliations of the general ledger and closing of the books were secondary. The Corporation subsequently relied on an Accounting Consultant to assist in reconciling its books and preparing its closing financial statements. However, there was limitations in the Corporation?s ability to reconcile its specialized medical insurance billings and PRC program expenditures. The Corporation will continue with late audit reports for its fiscal years 2020 and 2021.