Saint Michael's Clinics, Inc.

Finding 2024-001 Internal control deficiency and noncompliance over Eligibility. Identification of the federal program: Assistance Listing Number 93.914: • HIV Emergency Relief Project Grants • U.S. Department of Health and Human Services • Federal award identification number – Not available • Federal award year – March 1, 2022 to February 28, 2025 • Pass-through entity – City of Newark Criteria or specific requirement (including statutory, regulatory or other citation): Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.303 Internal controls. The non-Federal entity must: (a) Establish 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). The grant agreement of the award requires the following: • Re-certification is required six months after certification and must include verification of income and household size < 500% of federal poverty level, residency, and health insurance status. Changes in status must be documented. • Clients must be certified upon determination of eligibility, and every 12 months thereafter, by documentation of HIV/AIDS status (new clients only), income, household size, residency, and health insurance status. Condition: During our testing of eligibility, we observed management did not have effective internal controls in place to ensure patients were checked for eligibility every six months, annually, and retain supporting documentation to support household size and residency. This resulted in the Clinic being out of compliance with the program requirements outlined in the grant agreement. Cause: Management did not have effective internal controls in place over the compliance requirements as stated in the criteria or specific requirement section above. Effect or potential effect: Patients receiving services from this grant could potentially be ineligible to be in the program. Questioned costs: Questioned costs for Assistance Listing Number 93.914 – HIV Emergency Relief Project Grants are indeterminable. Context: During our testing over eligibility, we obtained a listing of 1,628 patients and selected a sample of 60. The sampling was a statistically valid sample. We found the following: • There were 9 out of 60 selections where the patient was not checked for eligibility every six months. • There was 1 out of 60 selections where the patient was not checked for eligibility annually. • There was 1 out of 60 selections where the Clinic did not have supporting documentation to support household size. • There were 3 out of 60 selections where the Clinic did not have supporting documentation to support residency. Identification as a repeat finding, if applicable: Yes – 2023-001 Recommendation: Management should develop and implement effective internal controls to ensure patients are checked for eligibility every six months, annually, and retain supporting documentation to support household size and residency. Views of responsible officials: Clinic management team acknowledges that from the audit selection made of 60 patients, 14 were not recertified during the six-month period and the supporting documentation was not always obtained or retained related to income verification, household size, residency, and health insurance status. The corrective action plan as developed for CY 2023 will be continued to be reinforced and followed. The plan did result in lower findings than in prior years. A new bullet was added in the fourth quarter of 2024 to further assist in meeting the compliance guidance. The addition is the last bullet listed below. • Revamped the job titles and description to encourage better return on recruitment efforts of medical case manager positions. • A position of Certified Case Counselor (CCC) – Lead, was created and filled to provide direct oversight over the medical case managers that perform the bi-annual certifications, and other daily tasks. • Added a quality management process, where Clinic clients are called ahead of time to notify them of their recertification requirements. • Data Analyst(s) generate a report of patients due for recertification 60 days in advance of the due date. The CCC-Lead is directly accountable to review the progress of the re-certification, and the process is monitored by the Assistant Manager of the clinic. The CCC-Lead and Assistant Manager monitor retention of all patients required supporting documentation in the patients’ medical records. • Patients that do not provide the required supporting documentation showing compliance with program eligibility as outlined in the grant agreement or are otherwise not able to be recertified six months after certification will be classified as inactive in the database used to submit invoices to the Ryan White HIV/AIDS Program. • CCC-Lead has been assigned to preview charts on the daily appointment book in EPIC and sending a list of the documentation required via email to case management staff as they meet with the patients.

Internal control deficiency and noncompliance over Eligibility. Information of the federal program: Assistance Listing Number 93.914: • HIV Emergency Relief Project Grants • U.S. Department of Health and Human Services • Federal award identification number – Not available • Federal award year – March 1, 2022 to February 28, 2025 • Pass-through entity – City of Newark Criteria or specific requirement (including statutory, regulatory or other citation): Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.303 – Internal controls. The non-Federal entity must: (a) Establish 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). The grant agreement of the award requires the following: • Re-certification is required six months after certification and must include verification of income and household size < 500% of federal poverty level, residency, and health insurance status. Changes in status must be documented. • Clients must be certified upon determination of eligibility, and every 12 months thereafter, by documentation of HIV/AIDS status (new clients only), income, household size, residency, and health insurance status. Condition: During our testing of eligibility, we observed management did not have effective internal controls in place to ensure patients were checked for eligibility every six months and retain supporting documentation to support income verification, household size, residency, and health insurance status. This resulted in the Clinic being out of compliance with the program requirements outlined in the grant agreement. Cause: Management did not have effective internal controls in place over the compliance requirements as stated in the criteria or specific requirement section above. Effect or potential effect: Patients receiving services from this grant could potentially be ineligible to be in the program. Questioned costs: Questioned costs for Assistance Listing Number 93.914 – HIV Emergency Relief Project Grants are indeterminable. Context: During our testing over eligibility, we obtained a listing of 3,164 patient visits and selected a sample of 60. We found the following: • There were 22 out of 60 selections where the patient was not checked for eligibility every six months. • There were 8 out of 60 selections where the Clinic did not have supporting documentation to support income verification. • There were 2 out of 60 selections where the Clinic did not have supporting documentation to support household size. • There were 3 out of 60 selections where the Clinic did not have supporting documentation to support residency. • There were 2 out of 60 selections where the Clinic did not have supporting documentation to support health insurance status. Identification as a repeat finding, if applicable: Yes – 2022-002 Recommendation: Management should develop and implement effective internal controls to ensure patients are checked for eligibility every six months and retain supporting documentation to support income verification, household size, residency, and health insurance status. Views of responsible officials: Clinic management team acknowledges that from the audit selection made of 60 patients, 22 were not recertified during the six-month period and the supporting documentation was not always obtained or retained related to income verification, household size, residency, and health insurance status. A detail plan of correction has been developed and is listed below. With the exception of the last bullet below, these corrections were implemented in the fourth quarter of 2023 as a result of the 2022 finding. The last bullet was implemented in the first quarter of 2024. • Revamped the job titles and description to encourage better return on recruitment efforts of medical case manager positions. • A position of Certified Case Counselor (CCC) – Supervisor, was created and filled to provide direct oversight over the medical case managers that perform the bi-annual certifications, and other daily tasks. • Added a quality management process, where Clinic clients are called ahead of time to notify them of their recertification requirements. • Data Analyst(s) generate a report of patients due for recertification 60 days in advance of the due date. The CCC-Supervisor is directly accountable to review the progress of the re-certification and the process is monitored by the Assistant Manager of the clinic. The CCC-Supervisor and Assistant Manager monitor retention of all patient required supporting documentation in the patients’ medical records. • Patients that do not provide the required supporting documentation showing compliance with program eligibility as outlined in the grant agreement or are otherwise not able to be recertified six months after certification will be classified as inactive in the database used to submit invoices to the Ryan White HIV/AIDS Program.

Finding 2022-002: Internal control deficiency and noncompliance over Eligibility. Information of the federal program: Assistance Listing Number 93.914: ? HIV Emergency Relief Project Grants ? U.S. Department of Health and Human Services ? Federal award identification number ? Not available ? Federal award year: o March 1, 2021 to February 28, 2022 o March 1, 2022 to February 28, 2023 ? Pass-through entity ? City of Newark Criteria or specific requirement (including statutory, regulatory or other citation): Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.303 ? Internal controls. The non-Federal entity must: (a) Establish 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). The grant agreement of the award requires the following: ? Re-certification is required six months after certification and must include verification of income and household size < 500% of federal poverty level, residency, and health insurance status. Changes in status must be documented. Condition: During our testing of eligibility, we observed management did not have effective internal controls in place to ensure patients were checked for eligibility every six months and retain supporting documentation to support income verification. This resulted in the entity being out of compliance of the program requirements outlined in the grant agreement. Cause: Management did not have effective internal controls in place over the compliance requirements as stated in the criteria or specific requirement section above. Effect or potential effect: Patients receiving services from this grant could potentially be ineligible to be in the program. Questioned costs: Questioned costs for Assistance Listing Number 93.914 ? HIV Emergency Relief Project Grants are indeterminable, as program expenditures are not made on a per participant basis. Context: During our testing over eligibility, we obtained a listing of 1,785 patient visits and selected a sample of 65. We found the following: ? There were 15 out of 65 selections where the patient was not checked for eligibility every six months. ? There were 3 out of 65 selections where the entity did not have supporting documentation to support income verification. Identification as a repeat finding, if applicable: No. Recommendation: Management should develop and implement effective internal controls to ensure patients are checked for eligibility every six months and retain supporting documentation to support income verification. Views of responsible officials: Clinic management team acknowledges that from the audit selection made of 65 patients that 15 were not recertified during the six-month period and the supporting documentation was not retained related to income verification for 3 patients. A detail plan of correction has been developed and is listed below: ? Revamping the job titles and description to encourage better return on recruitment efforts of medical case managers position. ? A position of Certified Case Counselor (CCC) ? Supervisor, was created and filled to provide direct oversight over the medical case managers that perform the bi-annual certifications, and other daily tasks. ? Quality management process, where Clinic clients are called ahead of time to notify them of their recertification requirements. ? Data Analyst(s) will generate a report of patients due for recertification 60 days in advance of the due date. The CCC-Supervisor will be directly accountable to review the progress of the re-certification. This will be further monitored by the Assistant Manager of the clinic. The CCC-Supervisor and Assistant Manager will also monitor retention of income verification supporting documentation for patients.

Finding 2021-001 ? Internal control deficiency and noncompliance over amounts reported in the Schedule of Expenditures of Federal Awards. Information on the federal program: Assistance Listing Number 93.914: ? HIV Emergency Relief Project Grants ? U.S. Department of Health and Human Services ? Federal award identification number ? Not available ? Federal award year: ? March 1, 2020 to February 28, 2021 ? April 1, 2020 to March 31, 2021 ? March 1, 2021 to February 28, 2022 ? Pass-through entity ? City of Newark Criteria or Specific Requirement: Title 2, Subtitle A Chapter II Part 200 Subpart D 200.303 Internal controls. The non-Federal entity must: (a) Establish 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). Title 2 Subtitle A Chapter II Part 200 Subpart F 200.502 Basis for determining Federal awards expended states the following: (a) Determining Federal awards expended. The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards. Condition: During our testing over the SEFA, we observed management did not have effective internal controls in place to ensure accurate reporting of expenditures in the SEFA. This resulted in an overstatement of the balance reported in the SEFA. Cause: Management did not have effective internal controls in place to ensure accurate reporting of the expenditures in the SEFA. Effect or potential effect: The expenditures incurred were reported incorrectly in the SEFA. Questioned Costs: None. Context: During our testing over the SEFA, we observed management reported the incorrect balance on the SEFA by reporting the actual expenditures incurred in excess of the allowed grant agreement limit. The entity can only report up to the limit of the grant agreement in which they receive payment in accordance with their grant agreement. This resulted in an overstatement of the expenditures in the SEFA of $103,931. Management?s control regarding the review of the SEFA did not identify this overstatement. The amount reported in the SEFA was subsequently corrected and is reflected in the amount reported in the SEFA and the data collection form. Identification as a repeat finding, if applicable: No. Recommendation: Management should develop and implement effective internal controls to ensure the completeness and accuracy of the SEFA in order to properly reflect the correct federal expenditures. Views of responsible officials: Management acknowledges that during 2021 that the entity incurred more expenditures in some of the grant allocations compared to approved budgeted amounts. Expenditures that exceeded the overall grant amount were $103,931 dollars. However, the amount reimbursed by the granting agency was the lower budgeted amount. Our historical process of voucher submission to Ryan White and the direction given by the granting agency is to submit actual monthly expenditures on the monthly reports submitted to them. By submitting actual expenses in addition to the monthly unit of service metrics that is used to obtain reimbursement from Ryan White Peter Ho is transparent in its reporting with Ryan White. Going forward we will correct the SEFA and only report what up to the budgeted amounts which were paid by the granting agency instead of reporting actual expenditures.

Criteria: The Clinic should have processes and controls in place to reconcile all accounts on a timely basis. Condition: We observed that many accounts were not reconciled and then adjustments were made to the general ledger after the year end. These accounts included: cash, grants receivable and related revenue, patient services receivable and related revenue, inventory, accounts payable, and inter-division balances. Context: Account reconciliations were requested for testing. Cause: The Clinic is in its early stages of transitioning to a central accounting group under Prime Health Care Services ? Saint Michael?s, LLC (?the Manager?). The Manager implemented new systems in the prior year, and the Clinic?s closing procedures were not fully operational with efficiencies necessary to close the books on a timely basis. Effect: The condition could lead to inaccurate financial reporting and potential misstatement of the financial statements such that they are not in accordance with accounting principles generally accepted in the United States of America. Recommendation: We recommend that the Clinic improve its procedures through the Manager to reconcile its accounts on a more timely basis. Response: Management concurs with this finding and is implementing procedures to resolve this issue.

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