LIFELONG MEDICAL CENTER

Finding 2025-001 – Special Tests and Provisions – Significant Deficiency in Internal Control over Compliance Federal Program: U.S. Department of Health and Human Services Health Center Program Cluster (Federal Assistance Listing # 93.224/93.527) Federal Agency: U.S. Department of Health and Human Services Award Year: 2024-2025 Criteria: The recipient is required to comply with specific federal regulations and provisions outlined in 2 CFR Part 200, particularly those related to special tests and provisions for the Health Center Program Cluster. This includes maintaining an effective internal control environment to ensure sliding fee discounts are applied to patient charges consistent with the recipients sliding fee discount schedule. Condition/Cause: During the audit, it was identified that LifeLong did not retain underlying data in accordance with policy to support the sliding fee scale discount based on the patients’ family size or income. It was also identified that LifeLong did not properly apply the sliding fee scale discount in accordance with sliding scale policy based on the patients’ family size or income. There were several turnovers in the department which resulted in inconsistent application of the sliding scale policies and insufficient staff training on eligibility determination and documentation requirements. Potential effect: Certain patients may have been billed amounts in excess of and less than the amounts defined by the sliding fee discount schedule. Questioned costs: Not applicable. Context: We selected a sample of 40 patient visits from a statistically valid population of patients potentially eligible for benefits under the sliding fee schedule during the fiscal year ended June 30, 2025. In 2 out of 40 samples tested, LifeLong was unable to locate underlying support required per their policy. In 2 out of 40 samples tested, LifeLong did not properly apply the sliding fee scale discount based on the patients’ family size or income. Repeat Finding: This is a repeat finding. Recommendation: We recommend implementing stronger controls to ensure proper documentation and accuracy of sliding fee discounts. Specifically, the organization should ensure that proof of income is collected and saved before applying any discounts. Additionally, checks should be added to the Electronic Medical Record (EMR) or intake process to prevent discounts from being applied unless required income information is on file. A quick supervisor review should also be implemented, particularly for new patients or those with updated income information, to confirm that income documents match what is entered into the EMR before billing is finalized. These measures will enhance compliance and reduce the risk of errors in the discount process. Views of responsible officials: LifeLong concurs with the finding. LifeLong is working on retraining staff involved in Sliding Fee Discount Program (SFDP) and training all new staff at new hire orientations. In the future, LifeLong will perform periodic audits of sliding fee transactions.

Finding 2025-002 – Inadequate Documentation of Timesheet Approval for Payroll Costs Charged to the Grant – Significant Deficiency in Internal Control over Compliance Federal Program: U.S. Department of Health and Human Services Health Center Program Cluster (Federal Assistance Listing # 93.224/93.527) and Substance Abuse and Mental Health Services Projects of Regional and National Significance (Federal Assistance Listing # 93.243) Federal Agency: U.S. Department of Health and Human Services Award Year: 2024-2025 Criteria: Per 2 CFR 200.430(i) and LifeLong’s internal timekeeping policies, charges to federal awards must be supported by records that accurately reflect the work performed and must be reviewed and approved by an appropriate supervisor to ensure allowability, allocability, and reasonableness of labor costs. Condition: During our allowability testing of payroll costs charged to the Health Center Program Cluster and Substance Abuse and Mental Health Services Projects of Regional and National Significance, it was identified that timesheets for hourly employees lacked evidence of supervisory approval. For 4 out of 40 hourly employee samples tested, management was unable to provide documentation demonstrating that the related timesheets were reviewed and approved prior to payroll processing. Potential effect: Without documented supervisory approval, the internal control over payroll costs charged to the federal program may not be adequately supported. This represents a significant deficiency in the operation of internal controls that is important enough to merit the attention of those charged with governance. Questioned costs: No questioned costs are reported because payroll hours worked could be substantiated through alternative documentation; while not an instance of material noncompliance, the lack of approval documentation represents a significant deficiency in internal control over timekeeping requirements. Context: We selected a sample of 80 employee pay periods from a statistically valid population of employees eligible for payroll disbursement under the expenditures of federal awards during the fiscal year ended June 30, 2025, of which 40 employees are hourly employees. In 4 out of 40 samples tested, LifeLong was unable to provide documentation demonstrating that the related timesheets were reviewed and approved prior to payroll processing. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that LifeLong implements a standardized process requiring supervisory review and documented approval of all employee timesheets prior to payroll processing. This process should include clear guidelines for supervisors on timely review and approval, as well as retention of approved timesheets as supporting documentation. Additionally, periodic internal audits or spot checks could be conducted to verify adherence to these procedures and promptly address any discrepancies. Views of responsible officials: LifeLong concurs with the finding. LifeLong is working on strengthening its timekeeping and payroll approval controls to ensure that all hourly employees’ timesheets include documented supervisory approval prior to processing payroll or charging costs to any federal award.

Finding 2024-001 – Special Tests and Provisions – Significant deficiency in Internal Control over Compliance Federal Program: U.S. Department of Health and Human Services Health Center Program Cluster (Federal Assistance Listing # 93.224/93.527) Federal Agency: U.S. Department of Health and Human Services Award Year: 2023-2024 Criteria: The recipient is required to comply with specific federal regulations and provisions outlined in 2 CFR Part 200, particularly those related to special tests and provisions for the Health Center Program Cluster. This includes maintaining an effective internal control environment to ensure sliding fee discounts are applied to patient charges consistent with the recipients sliding fee discount schedule. Condition/Cause: During the audit, it was identified that LifeLong did not retain underlying data in accordance with policy to support the sliding fee scale discount based on the patients’ family size or income. There were several turnovers in the department which resulted in inconsistent application of the sliding scale policies and insufficient staff training on eligibility determination and documentation requirements. Effect: Certain patients may have been billed amounts in excess of and less than the amounts defined by the sliding fee discount schedule. Questioned costs: Not applicable. Context: We selected a sample of 40 patient visits from a statistically valid population of patients potentially eligible for benefits under the sliding fee schedule during the fiscal year ended June 30, 2024. In 8 out of 40 samples tested, LifeLong was unable to locate underlying support required per their policy. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that further processes and training be put in place to ensure that the sliding fee scale is accurately applied to all qualifying program participants and applicable documentation is retained. Views of responsible officials: LifeLong concurs with the finding. LifeLong is working on retraining staff involved in Sliding Fee Discount Program (SFDP) and training all new staff at new hire orientations. In the future, LifeLong will perform periodic audits of sliding fee transactions.

2022-001 Sliding Fee Discount Determination ALN: 93.224 Program: Community Health Center Cluster Agency: US Department of Health and Human Services Compliance Requirement: N- Special Tests and Provisions Repeat Finding: No Criteria: Federal grant compliance provisions require that LifeLong correctly identify a patient's ability to pay and that the rates for services be adjusted accordingly based on the sliding fee schedule. LifeLong is required to follow its sliding fee policy when providing discounts to eligible patients. Finding/ Condition: In our sample of 40 tested items, patient information was inadequate to determine the proper sliding fee discount or the patient was given incorrect discounts based on information provided. Questioned Cost: None. Effect: Lack of strict enforcement of the policy of sliding fee eligibility determination and compliance may have resulted in LifeLong providing discounted services greater to or less than the appropriate amounts to beneficiaries. Cause: Inadequate understanding of the sliding fee program requirements and LifeLong policies by employees involved in sliding fee determination. Recommendation: Training should be provided to employees on the sliding fee program requirements. LifeLong should perform regular audits of sliding fee transactions to identify weaknesses in compliance. Views of Responsible Officials and Corrective Action Plan: LifeLong agrees with the finding and will implement additional controls to ensure that this does not recur. Please refer to the corrective action plan on page 58.

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