LA FAMILIA MEDICAL CENTERNon-Profit

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 Organization was unable to provide documentation to support management review and approval of the eight drawdown requests selected for testing prior to the drawdowns occurring. Effect The incorrect amount of federal funds may be requested to be drawn down. Questioned Costs None identified. Cause Management Oversight. Drawdowns were prepared and submitted without secondary review. 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 is in agreement with finding. The control issue was due to turnover in finance staff during fiscal year 2025. Under the direction of the Organization’s new CFO, the following revised procedures for cash management have been implemented for fiscal year 2026: • Payroll Documentation: A staff accountant or the controller will compile payroll expense details along with supporting documentation for each drawdown. • Review and Approval: This documentation is submitted to the CFO for review prior to any fund transfer. • Drawdown Execution: Upon approval, the CFO will initiate the drawdown from PMS. • Frequency: Drawdowns are processed on a biweekly basis and reflect expenses from the preceding payroll cycle. Upon completion of the drawdown, the CFO will save a copy of the drawdown request to the internal drive. • This drawdown receipt is reviewed by a second staff member, either the controller or senior accountant. • Drawdowns are also reviewed during monthly bank reconciliations.

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 one visit that did not have a sliding fee discount application on file to verify the sliding fee discount amount and two visits where the patient received an incorrect sliding fee adjustment based on their income and family size. 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 These errors are due to incorrect slide percentage amounts being put into eCW. There is also a known issue within eCW where the eCW changes the slide amount to either 100% or a different slide than was entered. The Organization has found a work around so that the Organization can fix this issue before claims are adjusted. Billing will start reviewing slide documents prior to applying slide to make sure that the percentage entered into eCW is correct for income/family size. These will also be reviewed by the front desk manager and lead patient service representative.

2024 – 001 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: 7/1/23 - 6/30/24 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 forty sliding fee discounts for health center patients qualifying for reduced charge visits, we identified two visits didn’t have a sliding fee discount application on file to verify the sliding fee discount amount. 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 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 corrected the claims on October 17, 2024 to reverse the sliding fee discounts that were provided without proper sliding fee application support and billing staff will work with the patients to attempt to collect the balance. The Organization has made changes to its workflow and provided education to staff instructing them the importance of sliding fee applications and only applying the correct sliding fee discount amount when proper documentation support exists.

2024 – 002 Procurement and Suspension and Debarment Federal Agency: U.S. Department of Health and Human Services Federal Program: Consolidated Health Centers Grant AL Number: 93.224 & 93.527 Award Period: 7/1/23 - 6/30/24 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 Award 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 We noted the Organization is not in compliance with requirements related to Procurement, Suspension and Debarment. During our testing, we noted the following exception:  For one of the procurement transactions tested the Organization did not retain support to document the procurement methods followed (I.e., sole source, small purchases, sealed bids, proposals, etc.). Effect The auditor noted instances of noncompliance. Noncompliance results in possible federal funds provided to ineligible subrecipients and/or vendors. Questioned Costs None identified. Cause The Organization lacked a process to ensure all supporting procurement documentation is retained to support the procurement method used. Recommendation We recommend the Organization retain all documentation and support to show that the procurement policy was followed. Views of Responsible Officials The Organization maintains procurement policies and procedures, including sole source award procedures, that closely track federal procurement regulations. However, the Organization was unable to locate the sole source documentation prepared at the time of the award in 2021. This is likely attributable to management turnover, along with the operational impact of the COVID Public Health Emergency in effect at that time. The Organization will schedule training for managers on procurement, sole source awards, and document retention. In addition, the Finance Department will review its forms and workflows to ensure filing accuracy and strengthen procurement controls.

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 forty sliding fee discounts for health center patients qualifying for reduced charge visits, we identified one visit that received the incorrect sliding fee discount. 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 The Organization corrected the claim on November 15, 2023 to give the patient the appropriate sliding fee discount. The Organization has provided education to staff instructing them that the charges quoted at a patient's slide will change if the slide is different at the time of service. IT has also added verbiage to the dental treatment plans stating that the slide at the time of service will be applied even if the quoted price was at a different slide.

Criteria or Specific Requirement 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award 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 We noted the Organization is not in compliance with requirements related to Procurement, Suspension and Debarment. During our testing, we noted the following exception: • For two of the five procurement transactions tested the Organization did not retain support to document the procurement methods followed (I.e., sole source, small purchases, sealed bids, proposals, etc.). Effect The auditor noted instances of noncompliance. Noncompliance results in possible federal funds provided to ineligible subrecipients and/or vendors. Questioned Costs None identified. Cause The Organization lacked a process to ensure all supporting procurement documentation is retained to support the procurement method used. Recommendation We recommend the Organization retain all documentation and support to show that the procurement policy was followed. Views of Responsible Officials The Organization does have a policy for Procurement, Suspension, and Debarment. The procurement documents were misfiled and staff have not been able to locate the documents. The Organization provided education to staff on the importance of retention of records and ensuring documents are filed in the correct folders.

Condition In one of thirteen samples tested, documentation was not provided to support procurement compliance and control requirements being properly followed. Criteria Per 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements (the Uniform Guidance), section 200.318 General Procurement Standards, the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Effect The finding indicates that there could be some process improvement in how contracts are reviewed, documented, and maintained to evidence that compliance requirements are being met. Cause The Organization?s processes and policies are inconsistently applied. Context The Organization did not provide support for evidence of compliance and control with procurement requirements, or support provided indicated noncompliance. One of thirteen samples did not contain evidence that procurement policies were properly followed as required. Recommendation We recommend the Organization develop a more robust internal control that monitors the workflow of contract processing surrounding procurement to ensure compliance requirements are met.

Condition During our testing, we identified transactions which the Organization contracted with vendors for services that exceeded the $25,000 threshold and did not consistently retain the suspension and debarment documentation to show the review took place before the transaction was entered into. Criteria Per 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements (the Uniform Guidance), Nonfederal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. "Covered transactions" include those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. All nonprocurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency-adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transactions. When entering into a covered transaction, to determine if the entity or person is excluded or disqualified, this can be done by one of the following: (1) checking the Government wide System for Award Management Exclusions (SAM) to determine if an entity is debarred or suspended, (2) collecting a certification from that person, or (3) adding a clause or condition to the covered transaction. Effect The Organization may unintentionally enter into a covered transaction with a suspended or debarred entity. Cause The Organization?s processes and policies are inconsistently applied. Context There were transactions entered into where there was no support to show that the suspension and debarment review took place prior to the transaction being entered into by the Organization. Recommendation We recommend the Organization develop a more robust internal control that monitors the workflow of application processing to ensure compliance requirements are met.

Condition Of the 40 sliding fee eligible patients selected for testing, one was given an incorrect sliding fee per the Organization?s policy. Criteria Health centers must prepare and apply a sliding fee discount schedule (SFDS) so that the amounts owed for health center services by eligible patients are adjusted (discounted) based on the patient?s ability to pay as determined by the Department of Health and Human Services official poverty guidelines. The Organization should have internal controls designed to ensure compliance with that provision. Effect The Organization?s application of the sliding fee discounts could inadvertently under or over charge eligible patients. Cause The Organization?s processes and policies are inconsistently applied due to human error. Context Of the 40 sliding fee eligible patients selected for testing, one was given an incorrect sliding fee per the Organization?s policy which resulted in decreased charges based on the ability to pay. During our testing, it was noted that the Organization has identified areas of improvement for adequate internal controls designed to ensure the proper sliding fee discount was calculated and applied to a patient?s account. Recommendation We recommend the Organization review policies and processes for providing sliding fee adjustments to patients and provide additional training. We would also recommend the Organization consider the review of patient sliding fee eligibility as part of the Organization?s ongoing quality control monitoring.

Condition and Context During our testing, we identified transactions which the Organization contracted with vendors for services that exceeded the $25,000 threshold and did not consistently retain documentation for the bidding process for these services. Criteria Per procurement standards, nonfederal entities other than States, must follow the procurement standards set out at 2 CFR Sections 200.318 through 200.326. Per 2 CFR Section 200.319, procurement expenditures require documentation over the bidding process. Effect Potential misuse of grant resources. Cause The individual within the finance department that was responsible for retaining the procurement documentation left the Organization and the documentation has not been able to be found. Recommendation We recommend that the Organization implement processes and procedures to ensure that all disbursements charged to the federal grant are supported, approved, follow the proper procurement standards, and documentation supporting the procurement process is retained. Management?s Response Management has revised the policy and procedure for validating and retaining documentation for contracted vendors for services exceeding $25,000 to ensure all documentation related to the contractor is complete, updated periodically, and stored in a centralized location.

Condition During our testing, it was noted that the Organization did not have adequate internal controls designed to ensure the proper sliding fee discount was calculated and applied to a patient?s account. Criteria Health centers must prepare and apply a sliding fee discount schedule (SFDS) so that the amounts owed for health center services by eligible patients are adjusted (discounted) based on the patient?s ability to pay as determined by the Department of Health and Human Services official poverty guidelines. The Organization should have internal controls designed to ensure compliance with that provision. Effect The Organization?s application of the sliding fee discounts could inadvertently under or over charge eligible patients. Cause The Organization?s processes and policies are inconsistently applied due to human error. Context Of the 40 sliding fee eligible patients selected for testing, one was given an incorrect sliding fee per the Organization?s policy which resulted in increased charges based on the ability to pay. We also noted one patient that received a sliding fee did not have a sliding fee application on file. Recommendation We recommend the Organization review policies and processes for providing sliding fee adjustments to patients and provide additional training. We would also recommend the Organization consider the review of patient sliding fee eligibility as part of the Organization?s ongoing quality control monitoring. Management?s Response Management has put controls in place to ensure staff are trained appropriately on the policy and procedure for providing sliding fee adjustments and sliding fee documentation is audited frequently.

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION