LA CLINICA TEPEYAC, INC.

Criteria or Specific Requirement Per Title 42 Chapter 1 Subchapter D Section 51c303(f), “Health centers must have a schedule of fees or payments for the provision of their health services consistent with locally prevailing rates or charges designed to cover their reasonable costs of operation. They are also required to have a corresponding schedule of discounts applied and adjusted on the basis of the patient’s ability to pay.” Condition and Context During our testing of 60 sliding fee discounts for health center patients qualifying for reduced charge visits, we identified one visit where a slide was provided, but there was no application on file to support the slide that was applied. We also noted two visits where a sliding fee was incorrectly given to a patient due to clerical errors. Effect Potential that a patient would not receive the appropriate sliding fee discount or may receive a discount when they have not applied for one. Questioned Costs None identified. Cause Clerical error in which either the sliding fee rate was miscalculated, the incorrect sliding fee rate was selected and applied, or the sliding fee application was not scanned into the patients file due to lack of an oversight process in place. Recommendation We recommend the Organization to review internal controls in regards to the determination, recording, and monitoring of the sliding fee process to ensure that appropriate sliding fee rates/categories are utilized for each sliding fee encounter and that all documentation supporting the sliding discount provided is retained. Views of Responsible Officials The Organization continues to make improvements to processes and procedures to ensure the accurate documentation and application of the sliding fee discounts. An improvement over the prior year's finding was realized, however more active internal audit checks and balances will need to be made to fully resolve these issues.

Criteria or Specific Requirement According to §200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must 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. Condition and Context During our testing, we noted 1 sample where the Organization overpaid an individual which resulted in costs being erroneously allocated to the grant. Effect Noncompliance results in potential for incorrect payroll costs allocated to federal grants. Questioned Costs Known: $2,166 Cause Management oversight and improper payroll calculation. An employee was overpaid during their final payroll at the Organization. Recommendation We recommend the Organization update their termination procedures to verify that final payrolls are being calculated correctly and update their grant allocation process to ensure accurate wage rates are used to calculate the allocations. Views of Responsible Officials Management has updated the payroll termination process to include a documented review before payroll is finalized. The finance team will review final payroll calculations for terminated employees after HR provides the termination details and payout calculation. Payroll changes and review steps are documented as part of the bi-weekly payroll update emails.

Criteria or Specific Requirement Per Title 42 Chapter 1 Subchapter D Section 51c303(f), “Health centers must have a schedule of fees or payments for the provision of their health services consistent with locally prevailing rates or charges designed to cover their reasonable costs of operation. They are also required to have a corresponding schedule of discounts applied and adjusted on the basis of the patient’s ability to pay.” Condition and Context During our testing of 60 sliding fee discounts for health center patients qualifying for reduced charge visits, we identified two visits where a slide was provided but there was no application on file to support the slide that was applied and two visits where an incorrect sliding fee was given to a patient based on their income and family size. Effect Potential that a patient would not receive the appropriate sliding fee discount. Questioned Costs None identified. Cause Clerical error in which the application was not scanned into the patients chart due to lack of an oversight process in place. Recommendation We recommend the Organization to review internal controls in regards to the determination, recording, and monitoring of the sliding fee process to ensure that appropriate sliding fee rates/categories are utilized for each sliding fee encounter.Views of Responsible Officials The Organization made changes to improve the process and procedure based on the 2023 audit finding, but they were not implemented until mid-year 2024 based on the completion of the audit. It is expected that 100% improvement in findings would not take place with this late implementation. There was an improvement over the prior year, especially in the lack of documentation on file. The monthly audit process to spot check applications for accuracy and ensure complete documentation in the chart was also implemented mid-year in 2024.

Criteria or Specific Requirement According to §200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must 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. Condition and Context During our testing, we noted the department was unable to provide documentation to support management approval prior to the drawdown of federal funds for 3 selections. Effect The Organization may drawdown the incorrect amount of federal funds. Questioned Costs None identified. Cause Management oversight. Approvals were done verbally and no documentation was recorded. Recommendation We recommend the Organization to review internal controls in regards to the approval of federal fund drawdown requests.Views of Responsible Officials We have reviewed all our internal controls to ensure all approvals are documented. The procedure has been updated to include preparing the draw documentation, entering the accounts receivable invoice into the accounting system, which now requires an approval for all accounts receivable invoices. Once the accounts receivable invoices are approved in the accounting system then a draw down can be requested in the payment management system. This new process to ensure the documented approval of federal fund drawdown's was implemented mid-year 2024, after the three selections in this finding were completed.

Federal Agency: U.S. Department of Health and Human Services Federal Program: Consolidated Health Centers Grant AL Number: 93.224 & 93.527 Award Period: 1/1/23 - 12/31/23 Type of Finding: Material Weakness in Internal Control Over Compliance and Compliance Criteria or Specific Requirement Per Title 42 Chapter 1 Subchapter D Section 51c303(f), “Health centers must have a schedule of fees or payments for the provision of their health services consistent with locally prevailing rates or charges designed to cover their reasonable costs of operation. They are also required to have a corresponding schedule of discounts applied and adjusted on the basis of the patient’s ability to pay.” Condition and Context During our testing of sixty sliding fee discounts for health center patients qualifying for reduced charge visits, we identified five visits where a slide was provided but there was no application on file to support the slide that was applied. Effect Potential that a patient would not receive the appropriate sliding fee discount. Questioned Costs None identified. Cause Clerical error in which the application was not scanned into the patients chart due to lack of an oversight process in place. Recommendation We recommend the Organization to review internal controls in regards to the determination, recording, and monitoring of the sliding fee process to ensure that appropriate sliding fee rates/categories are utilized for each sliding fee encounter. We also recommend the Organization put a process in place to make sure all applications are retained. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2023 – 001 Special Tests: Application of Sliding Fee Discount (Continued) Views of Responsible Officials The Organization made several changes at the end of 2023 to ensure we appropriate documentation in patient charts. The following is a summary of the changes: • Hired a patient services manager to manage the front desk and call center in November 2023. • Moved sliding fee application process to the front desk from enrollment, previously the applications were handed off for scanning. Now the front desk owns the entire process from getting the application from the patient to scanning it into the chart. • We have implemented a monthly audit process to spot check applications for accuracy and ensure complete documentation in the chart. • We also began using an app called Luma to help patients complete sliding fee electronically when a patient is comfortable. This eliminates the need to scan documents.

Federal Agency: U.S. Department of Health and Human Services Federal Program: Consolidated Health Centers Grant AL Number: 93.224 & 93.527 Award Period: 1/1/23 - 12/31/23 Type of Finding: Significant Deficiency in Internal Control Over Compliance and Compliance Criteria or Specific Requirement According to §200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must 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. Condition and Context During our testing, we noted the department was unable to provide documentation to support management review and approval of the cash drawdowns prior to the drawdown of the federal funds. Effect The Organization may drawdown the incorrect amount of federal funds. Questioned Costs None identified. Cause Management oversight. Approvals were done verbally and no documentation was recorded. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2023-002 – Cash Management (Continued) Recommendation We recommend the Organization to review internal controls in regards to the approval of federal fund drawdown requests. Views of Responsible Officials The Organization has reviewed all of our internal controls to ensure all approvals are documented. The procedure has been updated to include preparing the draw documentation, entering accounts receivable invoice into the accounting system, which now requires an approval for all accounts receivable invoices. Once the accounts receivable invoices are approved in the accounting system then a drawdown can be requested in the payment management system.

2022 ? 001 Procurement and Suspension and Debarment Federal Agency: U.S. Department of Health and Human Services Federal Program: Consolidated Health Centers Grant and Community Project Funding/Congressionally Directed Spending - Construction AL Number: 93.224 & 93.527 and 93.493 Award Period: 1/1/22 - 12/31/22 Type of Finding: Significant deficiency in Internal Control over Compliance and Compliance Criteria or Specific Requirement 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards requires compliance with the provisions of procurement and suspension and debarment. The Organization should have internal controls designed to ensure compliance with these provisions. Condition and Context During our testing over suspension and debarment, we noted the two instances in which the Organization did not perform the suspension and debarment check prior to entering into a transaction with a vendor. Effect The auditor noted an instance of noncompliance. Noncompliance could result in possible federal funds being provided to ineligible vendors. Questioned Costs None identified. Cause The Organization lacks established internal controls and procedures over financial grant management. The Organization did not perform the suspension and debarment check prior to entering into the transaction. Recommendation We recommend the Organization implement a process to ensure suspension and debarment checks are performed and documentation to show that the checks are occurring prior to entering into transactions with vendors. Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) 2022 ? 001 Procurement and Suspension and Debarment (Continued) Views of Responsible Officials The Organization has updated is procurement and suspension and debarment processes to include the following procedures and internal controls: ? The Organization has implemented a process to ensure suspension and debarment checks are performed prior to entering into a transaction with new vendors. The Organization utilizes Sam.gov to perform the suspension and debarment checks. In addition to completing the suspension and debarment checks with new vendors, the accounting and compliance departments will also verify quarterly that existing vendors are not on the suspended and debarred listing. ? An Approved Vendor List will be added on the Organization?s Public Sharepoint. The approved vendor list will be added as of July 31, 2023. Before a new vendor is selected by internal management staff, they must refer to the approved vendor list to see if goods or services can be acquired from one of the approved vendors. If a new vendor must be selected, the manager must send documentation that a suspension and debarment check has occurred and a copy of the RFP (when applicable) before using the vendor for goods or services. The accounting manager will review the new vendor selection to verify that the suspension and debarment check occurred. Once this has been verified the accounts payable coordinator will be given the approval to add the new vendor to the accounting software. The accounts payable coordinator will add screen shots of the verification in the accounting software under each vendor. The accounts payable coordinator will also retain Vendor Files in Sharepoint, which include, verifications, vendor invoices, and any vendor contracts.

2022 ? 002 Special Tests: Application of Sliding Fee Discount Federal Agency: U.S. Department of Health and Human Services Federal Program: Consolidated Health Centers Grant AL Number: 93.224 & 93.527 Award Period: 1/1/22 - 12/31/22 Type of Finding: Significant deficiency in Internal Control over Compliance and Compliance Criteria or Specific Requirement Per Title 42 Chapter 1 Subchapter D Section 51c303(f), ?Health centers must have a schedule of fees or payments for the provision of their health services consistent with locally prevailing rates or charges designed to cover their reasonable costs of operation. They are also required to have a corresponding schedule of discounts applied and adjusted on the basis of the patient?s ability to pay.? Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) 2022 ? 002 Special Tests: Application of Sliding Fee Discount (Continued) Condition and Context During our testing of forty sliding fee discounts for health center patients qualifying for reduced charge visits, we identified one visit that received the incorrect sliding fee discount. We also identified one visit where the Organization was not able to locate the sliding fee discount application. Effect Potential that a patient would not receive the appropriate sliding fee discount. Questioned Costs None identified. Cause Clerical error in which the incorrect discount was applied due to lack of an oversight process in place. Recommendation We recommend the Organization to review internal controls in regards to the determination, recording, and monitoring of the sliding fee process to ensure that appropriate sliding fee rates/categories are utilized for each sliding fee encounter. We also recommend the Organization put a process in place to make sure all applications are retained. Views of Responsible Officials The Organization will implement the following peer review process: ? A peer review is required to determine the appropriate sliding fee calculation was made based on family size and income of the applicant. ? A reference and training guide will be created by the Organization for front desk staff and enrollment specialists to utilize by September 30, 2023. ? Each sliding fee application will be reviewed by a peer and signed off by both the submitter and the peer reviewer. A verification checklist will be utilized to ensure the sliding fee application is accurate and complete. ? The finance department will receive a list of all new sliding fee applications from the previous month and pull a sample of twenty applications to review for accuracy and to confirm the peer review occurred. ? The Organization will implement a process where the patients will complete the sliding fee application prior to seeing the provider. The process is expected to be implemented by October 31, 2023.

Finding 2021-002: Special Tests - Application of Sliding Fee Discount Federal Agency: U.S. Department of Health and Human Services Federal Program: Consolidated Health Centers Grant AL Number: 93.224 and 93.527 Award Period: January 1, 2021 to December 31, 2021 Type of Finding: Material Weakness in Internal Control over Compliance and Compliance Criteria Per Title 42 Chapter 1 Subchapter D Section 51c303(f), ?Health centers must have a schedule of fees or payments for the provision of their health services consistent with locally prevailing rates or charges designed to cover their reasonable costs of operation. They are also required to have a corresponding schedule of discounts applied and adjusted on the basis of the patient?s ability to pay.? Condition Found and Context During our testing of 40 sliding fee discounts for health center patients qualifying for reduced charge visits, we identified two visits that received the incorrect sliding fee discount and one visit where a patient was given a sliding fee discount but did not have an active sliding fee discount application on file. Effect Potential that a patient would not receive the appropriate sliding fee discount. Questioned Costs None identified. Cause Clerical error in which the incorrect discount was applied due to lack of an oversight process in place. Recommendation We recommend the Organization to review internal controls in regards to the determination, recording, and monitoring of the sliding fee process to ensure that appropriate sliding fee rates/categories are utilized for each sliding fee encounter. Views of Responsible Officials and Planned Corrective Actions In December of 2021, in response to the 2020 findings in regards to the Sliding Fee Discount, the Organization installed two new processes to help improve the accuracy of our sliding fee discount process: 1 ? each application is double checked and signed off on for accuracy by a second individual working in the front office. 2 ? the revenue cycle manager and front office lead pull a sample of ten Sliding Fee Discount applications to review each month. If inaccuracies are found, training material and follow up are provided to the front desk team.

Criteria Per Title 42 Chapter 1 Subchapter D Section 51c303(f), ?Health centers must have a schedule of fees or payments for the provision of their health services consistent with locally prevailing rates or charges designed to cover their reasonable costs of operation. They are also required to have a corresponding schedule of discounts applied and adjusted on the basis of the patient?s ability to pay.? Condition Found and Context During our testing of 29 sliding fee discounts for health center patients qualifying for reduced charge visits, we identified five visits that received the incorrect sliding fee discount. Effect Potential that a patient would not receive the appropriate sliding fee discount. Cause Clerical error in which the discount fee applied used the sliding fee discount schedule that was in place in the prior period, rather than use of the updated schedule, due to lack of an oversight process in place. Recommendation We recommend the Organization to review internal controls in regards to the determination, recording, and monitoring of the sliding fee process to ensure that appropriate sliding fee rates/categories are utilized for each sliding fee encounter. Views of Responsible Officials and Planned Corrective Actions In fiscal year 2021 the Organization is developing and implementing a corrective action plan to address the audit finding on the sliding fee discount applications. The finding identified that some patients had received an incorrect discount. The plan will include the following elements: ? An updated sliding fee procedure that includes details to make sure every step of the process is clear for staff and patients. ? Management will create training and best practices for the team to use as a reference guide. ? There will be an application review process that will require two employees to verify the income that was calculated and entered the electronic health record system. The reviewer will also verify the calculation of the sliding fee discount. A monthly internal audit process will also be implemented to include random reviews of ten applications to ensure the correct discount was applied. This audit will be performed by the finance team.

Criteria Per Title 42 Chapter 1 Subchapter D Section 51c303(f), ?Health centers must have a schedule of fees or payments for the provision of their health services consistent with locally prevailing rates or charges designed to cover their reasonable costs of operation. They are also required to have a corresponding schedule of discounts applied and adjusted on the basis of the patient?s ability to pay.? Condition Found and Context During our testing of 40 sliding fee discounts for health center patients qualifying for reduced charge visits, we identified two visits that received the incorrect sliding fee discount. Effect Potential that a patient would not receive the appropriate sliding fee discount. Cause Clerical error in which the discount fee applied used the sliding fee discount schedule that was in place in the prior period, rather than use of the updated schedule, due to lack of an oversight process in place. Recommendation We recommend the Organization to review internal controls in regards to the determination, recording, and monitoring of the sliding fee process to ensure that appropriate sliding fee rates/categories are utilized for each sliding fee encounter. Views of Responsible Officials and Planned Corrective Actions To minimize the opportunity for errors when applying the sliding fee scale discounts, La Clinica Tepeyac will implement additional controls to ensure the most recently approved sliding fee scale is uploaded into the electronic health record and used when calculating the sliding fee discounts provided to patients. La Clinica Tepeyac will also provide training to staff and review sliding fee applications to ensure that the applications are being completed accurately.

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