David Raines Community Health Center, Inc.

Finding 2025-001 Material Instance of Non-Compliance - Cash Management of Federal Funds This finding relates to the cash management compliance requirement for the major program, Health Center Program Cluster, Assistance Listing Numbers 93.224 - Health Center Program and 93.527 - Grants for New and Expanded Services under the Health Center Program, administered by the Health Resources and Services Administration (HRSA), U.S. Department of Health and Human Services. Criteria: Pursuant to 2 CFR §200.305, non-Federal entities must minimize the time elapsing between the transfer of Federal funds from the Federal awarding agency or pass-through entity and the disbursement of those funds for program purposes. Advance payments must be limited to the minimum amounts needed, and timed to be in accordance with the actual, immediate cash requirements of the recipient. Condition: During our testing, we identified one instance in which the Center drew down $702,681 of HRSA Section 330 Base grant funds when only $351,341 of allowable expenditures had been incurred. As a result, the Center received Federal funds in advance of its immediate cash needs by approximately $351,340. Cause: The condition resulted from a lack of proper oversight to ensure that drawdown requests were based on actual, incurred, and allowable expenditures at the time of request. Effect: The Health Center was not in compliance with Federal regulations regarding cash management. Questioned costs: None. Although the timing of the drawdown was not in compliance with the cash management requirements, the funds were ultimately expended for the allowable purposes within the grant period. Was the finding a repeat of a finding in the immediately prior year? No Recommendation: Management should establish and implement procedures to ensure Federal drawdowns are based on actual, allowable expenditures or immediate cash needs in accordance with 2 CFR §200.305. Draw requests should be reviewed and approved to verify that amounts requested do not exceed current allowable expenditures or immediate cash requirements. Management Response: Management concurs with the finding. During the period under audit, the Health Center inadvertently did a duplicative Federal drawdown which was an administrative oversight. To address this deficiency and prevent future occurrences, management has implemented the following corrective actions: Duplicative Prevention Controls: Management has instituted a centralized drawdown tracking log to cross-reference and reconcile historical requests against immediate cash needs, eliminating the risk of administrative duplication. This has been fully implemented as of April 2026.

Finding 2020-1 SPECIAL TESTS AND PROVISIONS (SLIDING FEE SCALE) U. S. Department of Health and Human Services Consolidated Health Center Grant; Assistance Listing #93.224 and #93.527 Condition During our test of sliding fee patients, we noted five (5) instances out of 25 patient files reviewed in which the sliding fee discount was calculated incorrectly. Cause Failure to follow established Center procedures Effect Improper calculation of sliding fee discount Criteria Department of Health & Human Services guidelines, Section 330 of the PHS Act and 42 CFR Part 51c.303(f) which states Health Centers must provide a full discount to individuals with an annual income at or below 100% of the poverty guidelines and for those with incomes between 100% and 200% of poverty, fees must be charged in accordance with a sliding discount policy based on family size and income. Auditor's Recommendation The Center should strengthen internal administrative controls to ensure that the fees charged and level of discount a patient receives is calculated correctly based on income and family size.

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