CHARLOTTE COMMUNITY HEALTH CLINIC, INC.Non-Profit

Special Provisions – Sliding Fee Discount Federal Agency: Department of Health and Human Services Federal Program: Health Center Cluster Assistance Listing Number: 93.224 and 93.527 Award Period: 01/01/2024 – 12/31/2024 Type: Significant Deficiency in Internal Controls over Compliance Questioned Costs: None Condition: Supervisors should review the sliding fee discount program assessment form to determine if patients are eligible to receive sliding fee rates. Criteria: Must use specific sliding fee discount rates which are calculated based on income and household data. Supervisors should review the assessment form to ensure proper application. Cause: Supervisors review the sliding fee discount program assessment form weekly, however, there is no support that this review occurs for the selections made from the time period of January 2024 through October 2024. This was prior to the single audit report for the year ended December 31, 2023 being issued and prior to the corrective action plan for the year ended December 31, 2023 being placed into action. Selections made after the issuance of the single audit report for the year ended December 31, 2023 had documentation supporting that an individual separate from the preparer reviewed that the sliding fee scale was appropriately applied. Effect: Errors could lead to improper amounts being charged to the patient. Repeat Finding: Yes. Recommendation: CLA recommends that the sliding fee discount program assessment form is reviewed to ensure the proper rate is used for each patient. Documentation of the review should be maintained. View of Responsible Officials and Planned Corrective Actions: Management takes Exception with this Finding. Due to unforeseen circumstances CCHC’s FYE 2023 Annual Audit was not completed until November 2024. Of the sample examined for FYE 2023, Management was advised one sliding fee calculation was inaccurate. To address the FYE 2023 audit finding and to have a more robust reviewing process, Management conducted staff training and revised the oversight to include two signatures on all Sliding Fee Applications. The newly minted work process was introduced in December 2024. During the course of the FYE 2024 Annual Audit, the initial audit sample only included Sliding Fee Applications for the period January 2024-October 2024: resulting in 100% of the sample not having a secondary review. A review step that up until November 2024 had not been previously cited by the Auditors. Management would like to note, Sliding Fee calculation was 100% accurate as of December 2024.

Procurement – Written Rate Quotes Federal Agency: Department of the Treasury and Department of Health and Human Services Federal Program: Coronavirus State and Local Fiscal Recovery Funds and the Health Center Cluster Assistance Listing Number: 21.027, 93.224 and 93.527 Award Period: 01/01/2024 – 12/31/2024 Type: Significant Deficiency in Internal Controls over Compliance Questioned Costs: None Condition: At the start of a new project, no written rate quotes were obtained as required by the procurement policy. One of the vendors selected had worked on a previous project and proper procurement procedures were followed at that time, however, no new quotes were obtained for the new project. Criteria: The procurement policy states that for expected small purchases between $10,000 and $250,000 rate quotes must be obtained from an adequate number of qualified sources in writing and documentation should be maintained on file, and vendors over $10,000 should have a signed contract. Cause: The Clinic has a procurement policy, however, at the start of the new project quoted rates were not obtained for the existing vendor. Effect: Possible overpayment for the project. Repeat Finding: Yes. Recommendation: CLA recommends the procurement policy is consistently followed. View of Responsible Officials and Planned Corrective Actions: Management takes Partial Exception with this Finding. In an effort to be a good steward of Taxpayer/Federal Funding, Management consciousness chose to continue to work with a Construction Project Manager who had been previously vetted via the CCHC procurement process. CCHC had multiple projects in que and to ensure completion in the most expeditiously and fiscally responsible manner, Management chose to continue to work with a proven entity and monitor for spikes in cost and/or other outliers that may have caused a scintilla of concern. CCHC is currently in the process of revising the Procurement Policy to acknowledge potential future situations and may on occasion find the most cost effective/efficient option is a Sole Source award.

Special Provisions – Sliding Fee Discount Federal Agency: Department of Health and Human Services Federal Program: Health Center Cluster Assistance Listing Number: 93.224 and 93.527 Award Period: 01/01/2023 – 12/31/2023 Type: Significant Deficiency in Internal Controls over Compliance Questioned Costs: None Condition: Supervisors should review the sliding fee discount program assessment form to determine if patients are eligible to receive sliding fee rates. One of the 20 sliding fee discount program selections had an incorrect sliding fee discount rate applied to their services, resulting in the patient underpaying by approximately $195. Criteria: Must use specific sliding fee discount rates which are calculated based on income and household data. Supervisors should review the assessment form to ensure proper application. Cause: Supervisors review the sliding fee discount program assessment form weekly, however, this error was not caught during that weekly review. Effect: Errors could lead to improper amounts being charged to the patient. Repeat Finding: No. Recommendation: CLA recommends that the sliding fee discount program assessment form is reviewed to ensure the proper rate is used for each patient. Documentation of the review should be maintained. View of Responsible Officials and Planned Corrective Actions: The Clinic agrees with the finding. The Front Desk lead will review the sliding fee discount document and verify accuracy of calculation and sign the application.

Procurement – Written Rate Quotes Federal Agency: Department of the Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Period: 01/01/2023 – 12/31/2023 Type: Significant Deficiency in Internal Controls over Compliance Questioned Costs: None Condition: At the start of a new project, no written rate quotes were obtained as required by the procurement policy. One of the vendors selected had worked on a previous project and proper procurement procedures were followed at that time, however, no new quotes were obtained for the new project. Criteria: The procurement policy states that for expected small purchases between $10,000 and $250,000 rate quotes must be obtained from an adequate number of qualified sources in writing and documentation should be maintained on file. Cause: The Clinic has a procurement policy, however, at the start of the new project quoted rates were not obtained for the existing vendor. Effect: Possible overpayment for the project. Repeat Finding: No. Recommendation: CLA recommends the procurement policy is consistently followed. View of Responsible Officials and Planned Corrective Actions: The Clinic agrees with the finding. All small purchases between $10,000 and $250,000 will have rate quotes obtained from an adequate number of qualified sources in writing and documentation will be maintained in the vendor file. Anytime there is a new project that is utilizing federal-sourced funds, and the expected expenditure for that service/good is over $10,000 (but under $250,000), the Clinic will follow the simplified acquisition procedures as noted in 2 CFR Part 200 and the Clinic’s policy for small purchases.

Finding 2020-002: Lack of Documentation Ensuring Vendor is Not Suspended or Debarred Federal Agency: U.S. Department of Health and Human Services Federal Program: Consolidated Health Centers CFDA Number: 93.224 Award Period: 1/1/2020 ? 12/31/2020 Type of Finding: Significant Deficiency in Internal Control over Compliance Condition and Criteria: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred, including contracts for goods and services awarded under a non-procurement transaction that are expected to equal or exceed $25,000. Cause: In our sample of five (5) vendors, we noted no noncompliance, however, the Clinic was unable to provide documentation that the Clinic had verified the vendors were not suspended or debarred. Effect: The Clinic could make payments to a suspended or debarred vendor. Recommendation: We recommend that the Clinic continue to verify a vendor is not suspended or debarred, however, retain documentation verifying that process occurred. View of Responsible Officials and Planned Corrective Actions: The Clinic agrees with the finding. The Clinic will print documentation to include date and source of search when verifying debarment or suspension. A procedure will be created documenting the process. In addition, the Clinic is looking to hire a procurement specialist to add oversight of the purchasing processes to include debarment or suspension, quotes and bidding, and approvals. Name of the Contact Person Responsible for the Corrective Action: Carolyn Allison, CEO Planned Completion Date for the Corrective Action Plan: August 31, 2021