Legacy Medical Care, Inc.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants for New and Expanded Services Under the Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: L2C42352-01-00 Award Periods: July 1, 2021 – June 30, 2023; Type of Finding: Material noncompliance and Material weakness in internal control over compliance Criteria: Health centers must prepare and apply a sliding fee discount schedule so that the amounts owed for health center services by eligible patients are adjusted (discounted) based on the patient’s ability to pay. (42 USC 254(k)(3)(E), (F), and (G); 42 CFR sections 51c.303(e), (f), and (g); and 42 CFR sections 56.303(e), (f), and (g)). Condition: Legacy incorrectly assessed and/or applied the sliding fee discount to patient encounters during the year. Questioned Costs: None. Context: Five (5) of sixty (60) encounters selected for testing. Cause: Unknown. Effect: Patients are not charged according to Legacy's sliding fee scale and their ability to pay. Repeat Finding: Yes. Prior Year Finding: 2023-002. Recommendation: Management should consider increasing the frequency of its self-reviews of patient encounters or expanding its sample sizes in addition to providing additional training for front desk staff regarding the collection and verification of patient information for each patient. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds; Health Center Program Cluster Assistance Listing Number: 21.027; 93.224/93.527 Pass-Through Entity: Cook County Department of Public Health, N/A Pass-Through Number: None; N/A Award Periods: May 1, 2023-November 30, 2026; July 1, 2021 – June 30, 2023. Type of Finding: Material weakness in internal control over compliance Criteria: 2 CFR section 200.320 outlines the acceptable methods of procurement. Purchases below the simplified acquisition threshold, but above the micro-purchase threshold, require price or rate quotations to be obtained from an adequate number of qualified sources. Noncompetitive procurement can be used in certain circumstances however the non-Federal entity is to maintain appropriate documentation justifying the use of sole source procurement consistent with 2 CFR 200.320(c). Condition: Legacy did not maintain appropriate documentation to support the procurement method utilized for procurements selected for testing. Questioned Costs: Unknown. Context: One (1) of two (2) transactions selected for testing within 21.027 and three (3) of three (3) transactions selected for testing within 93.224/93.527. Cause: Legacy did not maintain appropriate documentation based on the method of procurement utilized. Effect: Legacy may inadvertently select vendors without regard to fair competition and cost analysis. Repeat Finding: Yes. Prior Year Finding: 2023-005. Recommendation: We recommend Legacy consistently follow its established policies and procedures related to maintaining necessary documentation to support the method of procurement utilized. Legacy may also consider qualifying multiple vendors for particular goods/service and then utilizing an approved vendors list. Views of Responsible Officials: There is no disagreement with the audit finding.

Finding 2024-004 – Allowable Costs Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants for New and Expanded Services Under the Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: L2C42352-01-00 Award Periods: July 1, 2021 – June 30, 2023. Type of Finding: Material weakness in internal control over compliance Criteria: § 200.303(a) indicates non-federal entities must establish, document and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Lack of supporting documentation demonstrating management's review and approval of costs prior to being charged to the grant and drawn down. Questioned Costs: None. Context: This condition impact all of the payroll transactions selected for testing. Cause: Unknown Effect: Incorrect payroll costs could be charged to the grant. Repeat Finding: No. Recommendation: We recommend the Organization maintain documentation demonstrating that the existing payroll review and approval process in place is functioning. Views of Responsible Officials: There is no disagreement with the audit finding.

Finding 2024-005 – Suspension and debarment Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds; Health Center Program Cluster Assistance Listing Number: 21.027; 93.224/93.527 Pass-Through Entity: Cook County Department of Public Health, N/A Pass-Through Number: None; N/A Award Periods: May 1, 2023-November 30, 2026; July 1, 2021 – June 30, 2023; Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6 outlines that the non-federal entity must verify that the agency in which it is entering into a contract is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: Legacy did not document that sam.gov was checked prior to entering into a contract with a vendor. Questioned Costs: None. Context: One (1) of two (2) vendors tested within 21.027 and two (2) of two (2) vendors within 93.224/93.527. Cause: Legacy did not create and maintain documentation showing that suspension and debarment had been checked prior to engaging a vendor. Effect: Contracted vendors may be ineligible to receive federal dollars for services performed. Repeat Finding: Yes. Prior Year Finding: 2023-006. Recommendation: We recommend that Legacy check, and document, the use of Sam.gov to verify that a vendor was not suspended, debarred, or otherwise excluded from participating in the transaction prior to entering into a contract. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants for New and Expanded Services Under the Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: L2C42352-01-00 Award Periods: July 1, 2021 – June 30, 2023; Type of Finding: Significant deficiency in internal control over compliance Criteria: Health centers must prepare and apply a sliding fee discount schedule so that the amounts owed for health center services by eligible patients are adjusted (discounted) based on the patient’s ability to pay. (42 USC 254(k)(3)(E), (F), and (G); 42 CFR sections 51c.303(e), (f), and (g); and 42 CFR sections 56.303(e), (f), and (g)). Condition: Legacy incorrectly assessed and/or applied the sliding fee discount to patient encounters during the year. Questioned Costs: None. Context: Three (3) of forty (40) encounters selected for testing. Cause: Unknown. Effect: Patients are not charged according to Legacy's sliding fee scale and their ability to pay. Repeat Finding: No. Recommendation: Management should consider increasing the frequency of its self-reviews of patient encounters or expanding its sample sizes in addition to providing additional training for front desk staff regarding the collection and verification of patient information for each patient. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: COVID-19 Vaccines Community-Based Education & Outreach (IVAX) Assistance Listing Number: 93.268 Pass-Through Entity: Illinois Primary Health Care Association Pass-Through Number: N/A Award Periods: July 1, 2022 – March 31, 2023 Type of Finding: Immaterial Noncompliance and Significant deficiency in internal control over compliance Criteria: A non-Federal entity that does not have a current negotiated indirect cost rate, may elect to charge a de minimis rate of 10% of modified total direct costs (MTDC) which may be used indefinitely. No documentation is required to justify the 10% de minimis indirect cost rate. As described in § 200.403, costs must be consistently charged as either indirect or direct costs, but may not be double charged or inconsistently charged as both. If chosen, this methodology once elected must be used consistently for all Federal awards until such time as a non-Federal entity chooses to negotiate for a rate, which the non-Federal entity may apply to do at any time. Condition: Legacy incorrectly calculated the reimbursement of in-direct costs when using the de minimis rate of 10%. Questioned Costs: $3,404. Context: Three (3) of three (3) in-direct cost transactions selected for testing. Cause: Unknown. Effect: Calculating indirect costs incorrectly could result in unallowable costs being charged to the grant. Repeat Finding: No. Recommendation: We recommend that a member of management review the monthly calculation of indirect costs to ensure it is calculated correctly. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: COVID-19 Vaccines Community-Based Education & Outreach (IVAX) Assistance Listing Number: 93.268 Pass-Through Entity: Illinois Primary Health Care Association Pass-Through Number: N/A Award Periods: July 1, 2022 – March 31, 2023 Type of Finding: Immaterial Noncompliance and Significant deficiency in internal control over compliance Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Costs outside of the period of performance were charged to the grant. Questioned Costs: $4,279 Context: Four (4) of seven (7) transactions tested. Cause: Unknown Effect: Legacy may allocate unallowable costs to the federal grant. Repeat Finding: Yes. Prior Year Finding: 2022-004. Recommendation: We recommend that only costs incurred during the period of performance be charged to the grant. For payroll in which periods extend over multiple budget periods, we recommend prorating the amount charged to the grant by days worked within the grant period. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants for New and Expanded Services Under the Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: L2C42352-01-00; Award Periods: July 1, 2021 – June 30, 2023; Type of Finding: Material weakness in internal control over compliance Criteria: 2 CFR section 200.320 outlines the acceptable methods of procurement. Purchases below the simplified acquisition threshold, but above the micro-purchase threshold, require price or rate quotations to be obtained from an adequate number of qualified sources. Noncompetitive procurement can be used in certain circumstances however the non-Federal entity is to maintain appropriate documentation justifying the use of sole source procurement consistent with 2 CFR 200.320(c). Condition: Legacy did not maintain appropriate documentation to support the procurement method utilized for procurements selected for testing. Questioned Costs: Unknown. Context: Five (5) of five (5) procurement transactions selected for testing. Cause: Legacy did not maintain appropriate documentation based on the method of procurement utilized. Effect: Legacy may inadvertently select vendors without regard to fair competition and cost analysis. Repeat Finding: Yes. Prior Year Finding: 2022-002. Recommendation: We recommend Legacy consistently follow its established policies and procedures related to maintaining necessary documentation to support the method of procurement utilized. Legacy may also consider qualifying multiple vendors for particular goods/service and then utilizing an approved vendors list. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants for New and Expanded Services Under the Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: L2C42352-01-00 Award Periods: July 1, 2021 – June 30, 2023 Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6 outlines that the non-federal entity must verify that the agency in which it is entering into a contract is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: Legacy did not document that sam.gov was checked prior to entering into a contract with a vendor. Questioned Costs: None. Context: Two (2) of two (2) vendors tested. Documentation was provided to show that sam.gov was checked, however it occurred on the last day of the fiscal year. Cause: Legacy did not create and maintain documentation showing that suspension and debarment had be checked prior to engaging a vendor. Effect: Contracted vendors may be ineligible to receive federal dollars for services performed. Repeat Finding: Yes. Prior Year Finding: 2022-003. Recommendation: We recommend that Legacy check, and document, the use of Sam.gov to verify that a vendor was not suspended, debarred, or otherwise excluded from participating in the transaction prior to entering into a contract. Views of Responsible Officials: There is no disagreement with the audit finding.

Finding 2022-002 ? Procurement Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants for New and Expanded Services Under the Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: L1CCS39368-01-00; L2CCS42352-01-00 Award Periods: July 1, 2020 ? June 30, 2021; July 1, 2021 ? June 30, 2023 respectively Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR section 200.320(c)(1) - (3) outlines the circumstances in which noncompetitive procurement can be used. Furthermore, the organization's procurement policy permits the use of noncompetitive procurement but requires the reason justifying a sole source procurement, together with a description of the supplies or services, to be documented in the appropriate file. Condition: Legacy did not document their rationale for the use of noncompetitive procurements. Questioned Costs: None. Context: Four (4) of Five (5) procurement transactions tested. Cause: Legacy did not create and maintain documentation for its rationale related to choosing the noncompetitive procurement method. Effect: Legacy may inadvertently select vendors without regard to fair competition and cost analysis. Repeat Finding: No. Recommendation: We recommend the organization consistently follow its established policies and procedures related to the maintaining of necessary documentation to support the rationale for using noncompetitive procurement, when applicable. Legacy may also consider qualifying multiple vendors for particular goods/service and then utilizing an approved vendors list. Views of Responsible Officials: There is no disagreement with the audit finding.

Finding 2022-003 ? Suspension and Debarment Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants for New and Expanded Services Under the Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: L1CCS39368-01-00; L2CCS42352-01-00 Award Periods: July 1, 2020 ? June 30, 2021; July 1, 2021 ? June 30, 2023 respectively Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6 outlines that the non-federal entity must verify that the agency in which it is entering into a contract is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: Legacy did not document that Sam.gov was checked prior to entering into a contract with a vendor. Questioned Costs: None. Context: Two (2) of two (2) vendors tested. Cause: Legacy did not create and maintain documentation showing that suspension and debarment had be checked prior to engaging a vendor. Effect: Contracted vendors may be ineligible to receive federal dollars for services performed. Repeat Finding: No. Recommendation: We recommend that Legacy retain documentation that Sam.gov was used to verify that a vendor was not suspended, debarred, or otherwise excluded from participating in the transaction prior to contract. The organization can keep screenshots that Sam.gov was checked or a PDF print out of the web page. Views of Responsible Officials: There is no disagreement with the audit finding.

Finding 2022-004 ? Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants for New and Expanded Services Under the Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: L1CCS39368-01-00; L2CCS42352-01-00 Award Periods: July 1, 2020 ? June 30, 2021; July 1, 2021 ? June 30, 2023 respectively Type of Finding: Immaterial Noncompliance and Significant deficiency in internal control over compliance Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Costs outside of the period of performance were charged to the grant. Questioned Costs: $20,910 Context: Four (4) of sixteen (16) transactions tested. Cause: Unknown Effect: Legacy may allocate unallowable costs to the federal grant. Repeat Finding: No. Recommendation: We recommend that only costs incurred during the period of performance be charged to the grant. For payroll in which periods extend over multiple budget periods, we recommend prorating the amount charged to the grant by days worked within the grant period. Views of Responsible Officials: There is no disagreement with the audit finding.