Hill Country Community Clinic

Federal Award Findings and Questioned Costs: 2024-001 Reporting (L) Significant Deficiency in Internal Controls over Compliance Identification of the Federal Program: U.S. Department of Health and Human Services; Health Clinic Program Cluster; ALN 93.224. Criteria or Specific Requirement: Recipients of federal awards must establish internal controls over reports that are prepared and submitted. Finding/Condition: Pursuant to the reporting requirement set forth by the Department of Health and Human Services, the Clinic is required to file the quarterly Federal Financial Report (FFR) within 30 days of the end of the quarter and submit the single audit to the Federal Audit clearinghouse within the sooner of 30 days of the issuance of the audit report or nine months after the end of the Clinic’s fiscal year. During our reporting period, we were unable to determine the submission of the quarterly reports and noted also that the audit was not completed and filed timely. Cause: Turnover in the Clinic’s management. Effect: The delay in submitting the required reports may lead to the granting agency to impose temporary restrictions on the drawdown of grant funds process. Questioned Cost: None Recommendation: The Clinic should establish reporting deadlines so that reports are filed accurately and on a timely basis. Views of Responsible Officials and Corrective Action Plan: In 2024, under a new Chief Financial Officer, the organization implemented a comprehensive tracking matrix to ensure all reporting timelines are met and to eliminate future non-compliance. Over the past two years, the organization has successfully brought all outstanding items current, including four audits, all tax returns, cost reports, UDS reports, and all regulatory and compliance requirements necessary to maintain good standing with HRSA, as well as all federal, state, and local funding sources. In January 2025, a formal corrective action plan was implemented to strengthen internal controls and ensure the timely completion of all future external audits. Additionally, the organization underwent a HRSA site visit and provided targeted board education to enhance members’ understanding of their fiduciary responsibilities, particularly related to the monthly review of financial statements and oversight of the audit process.

Health Center Program Cluster – Assistance Listing Numbers 93.224 and 93.527 U.S. Department of Health and Human Services Award No. 5 H80CS04226-18-00 Program Year 2023 Criteria or Specific Requirement – Special Tests and Provisions: Sliding Fee Discounts – 42 CFR 245(k)(3)(g); 42 CFR section 51c.303(g) and 42 CFR section 56.303(f). Condition – Patients who were eligible for sliding fee discounts under the Organization’s policy were not given sliding fee discounts or received sliding fee discounts inconsistent with the policy. Cause – The Organization did not comply with their sliding fee discount policy. Effect or potential effect – Improper sliding fee discounts were given and appropriate documentation was not maintained for all sliding fee discounts given. Questioned costs – None Context – A sample of 40 patients were tested out of the total population of 50,510 encounters. The sampling methodology used was not, and was not intended to be, statistically valid. Of the 40 transactions tested, 4 were determined to include errors in the application of the sliding fee discount program and policy. Identification as a repeat finding – Repeat finding of finding 2022-003 Recommendation – The Organization should continue to ensure all personnel understand the sliding fee scale policy and adhere to the requirements and guidelines set forth in the policy. Procedures should be implemented to ensure that eligible patients receive discounts in accordance with the sliding fee scale. Patient files should include documentation of eligibility to receive sliding fee scale discounts.

Certified Community Behavioral Health Clinic Expansion Grants Assistance Listing Number 93.696 U.S. Department of Health and Human Services Criteria or Specific Requirement – Cash Management (45 CFR 75.305) Condition – The Organization’s internal controls over compliance were not able to prevent an advance drawdown. Cause – The Organization was struggling to maintain adequate cash reserves and therefore advance drew on the award, with the knowledge that allowable expenditures would be incurred and covered by the draw in future periods. Effect or potential effect – Grant funds were drawn down sooner than administratively necessary. The one draw was not earned as of the end of three days prior to disbursement of allowable expenditures. Questioned Costs – None Context – Out of a population of sixteen draws, a sample of four draws were selected for testing. The sampling methodology used was not, and was not intended to be, statistically valid. Of the four draws tested, one draw was considered advanced Identification as a repeat finding, if applicable – Not a repeat finding Recommendation – The Organization should ensure procedures are followed to prevent cash draws from being drawn sooner than three days prior to disbursement of allowable expenditures.

Federal Assistance Listing Numbers 93.224 and 93.527 U.S. Department of Health and Human Services Award No. 5 H80CS04226-17-00 Program Year 2022 Criteria or Specific Requirement – Reporting – 45 CFR 75.342 Condition – The Organization is required to prepare and submit an annual Uniform Data Set (UDS) report for each calendar year, and annual Federal Financial Report (FFR) for each grant year and quarterly Federal Cash Transaction Reports (FCTR) for each grant budget period. These reports are to be prepared using accurate financial information. Questioned costs – None Context – Two reports from those listed above were selected for testing. The sampling methodology used is not, and was not intended, to be statistically valid. Of the eighteen inputs tested, two exceptions were noted related to the UDS report and three exceptions were noted related to the annual FFR. Effect – Errors were made on the annual UDS and annual FFR reports. Cause – The Organization’s policies and procedures did not identify certain errors that were noted on required reports. Turnover in key positions resulted in the Organization being unable to support the total of five attributes selected for testing on both the UDS report and annual FFR. Identification as a repeat finding – Repeat of 2021-002 finding Recommendation – The Organization should revise its policies and procedures over Federal reporting to ensure reports are prepared using accurate information.

Federal Assistance Listing Numbers 93.224 and 93.527 U.S. Department of Health and Human Services Award No. 5 H80CS04226-17-00 Program Year 2022 Criteria or Specific Requirement – Special Tests and Provisions: Sliding Fee Discounts – 42 CFR 245(k)(3)(g); 42 CFR section 51c.303(g) and 42 CFR section 56.303(f). Condition – Patients who were eligible for sliding fee discounts under the Organization’s policy were not given sliding fee discounts or received sliding fee discounts inconsistent with the policy. Questioned costs – None Context – A sample of 40 patients were tested out of the total population of 41,445 encounters. The sampling methodology used was not, and was not intended to be, statistically valid. Of the 40 transactions tested, 4 were determined to include errors in the application of the sliding fee discount program and policy. Effect – Improper sliding fee discounts were given and appropriate documentation was not maintained for all sliding fee discounts given. Cause – The Organization did not comply with their sliding fee discount policy. Identification as a repeat finding – Repeat finding of finding 2021-003 Recommendation – The Organization should continue to ensure all personnel understand the sliding fee scale policy and adhere to the requirements and guidelines set forth in the policy. Procedures should be implemented to ensure that eligible patients receive discounts in accordance with the sliding fee scale. Patient files should include documentation of eligibility to receive sliding fee scale discounts.

Federal Assistance Listing Number 93.243 U.S. Department of Health and Human Services Criteria or Specific Requirement – Cash Management (45 CFR 75.305) Condition – The Organization’s internal controls over compliance were not able to prevent an advance drawdown. Questioned Costs – None Context – Out of a population of twenty-four draws, a sample of six draws were selected for testing. The sampling methodology used was not, and was not intended to be, statistically valid. Of the six draws tested, four draws were considered advanced draws Effect – Grant funds were drawn down sooner than administratively necessary. The four draws were not earned as of the end of three days prior to disbursement of allowable expenditures. Cause – The Organization was struggling to maintain adequate cash reserves and therefore advance drew on the award, with the knowledge that allowable expenditures would be incurred and covered by the draws in future periods. Identification as a repeat finding, if applicable – Not a repeat finding Recommendation – The Organization should ensure procedures are followed to prevent cash draws from being drawn sooner than three days prior to disbursement of allowable expenditures.

Federal Assistance Listing Nos. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. 2 H80CS04226-16-00 Program Year 2021 Criteria or Specific Requirement – Reporting – 45 CFR 75.342 Condition – The Organization is required to prepare and submit an annual Uniform Data Set (UDS) report for each calendar year, and annual Federal Financial Report (FFR) for each grant year and quarterly Federal Cash Transaction Reports (FCTR) for each grant budget period. These reports are to be prepared using accurate financial information. Questioned costs – None Context – Two reports from those listed above were selected for testing. The sampling methodology used was not, was not intended to be, statistically valid. Of the eighteen inputs tested, two exceptions were noted related to the UDS report and two exceptions were noted related to the annual FFR. Effect – Errors were made on the annual UDS and annual FFR reports. Cause – The Organization’s policies and procedures did not identify certain errors that were noted on required reports. Turnover in key positions resulted in the Organization being unable to support two attributes selected for testing on the UDS report. Program income reported on the annual FFR was not reported at the correct amount nor on the proper lines. Identification as a repeat finding – Repeat of 2020-004 finding Recommendation – The Organization should revise its policies and procedures over Federal reporting to ensure reports are prepared using accurate information.

Federal Assistance Listing Nos. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. 2 H80CS04226-16-00 Program Year 2021 Criteria or Specific Requirement – Special Tests and Provisions: Sliding Fee Discounts – 42 CFR 245(k)(3)(g); 42 CFR section 51c.303(g) and 42 CFR section 56.303(f). Condition – Patients who were eligible for sliding fee discounts under the Organization’s policy were not given sliding fee discounts or received sliding fee discounts inconsistent with the policy. Questioned costs – None Context – A sample of 40 patients were tested out of the total population of 39,665 encounters. The sampling methodology used was not, and was not intended to be, statistically valid. Of the 40 transactions tested, 6 were determined to include errors in the application of the sliding fee discount program and policy. Effect – Improper sliding fee discounts were given and appropriate documentation was not maintained for all sliding fee discounts given. Cause – The Organization did not comply with their sliding fee discount policy. Identification as a repeat finding – Repeat finding of finding 2020-005 Recommendation – The Organization should continue to ensure all personnel understand the sliding fee scale policy and adhere to the requirements and guidelines set forth in the policy. Procedures should be implemented to ensure that eligible patients receive discounts in accordance with the sliding fee scale. Patient files should include documentation of eligibility to receive sliding fee scale discounts.

Federal Assistance Listing No. 93.498 U.S. Department of Health and Human Services COVID-19- Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Criteria or Specific Requirement – Reporting (45 CFR 75.342) and Activities Allowed/Unallowed and Allowable Costs/Cost Principles (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622, Pub. L. No. 116-260, Pub. L. No. 117-2) Condition – Within the Provider Relief Fund Reporting Portal for Period 1, the Organization reported other Provider Relief Fund (PRF) expenses and lost revenues calculated using option i. The Organization did not maintain adequate documentation to support some other PRF expenses were attributable to coronavirus, incurred following the accrual basis of accounting during the period of availability, and/or not eligible to be reimbursed by other sources. The Organization also did not calculate lost revenues following the accrual basis of accounting and other guidance issued by HHS. Questioned costs – $1,566,926; Calculated as total expense charged to PRF for Period 1. Context – The Period 1 PRF report was tested. The Organization allocated salaries and employee benefits to PRF for time associated with COVID-19 prevention activities; however, these salaries and benefits were not supported as incremental and necessary costs for the prevention, preparation and response to COVID-19 and a portion of these salaries and benefits were also reimbursed by other sources. The Organization calculated lost revenues of $668,478 based on patient service revenue information from the practice management system rather than lost revenues of $946,314 based on accrual basis financial records. Effect –Based on the Period 1 PRF report filed, the Organization utilized PRF payments received on expenses and lost revenues that were not attributable to coronavirus, were reimbursed by other sources, and/or were not allowable in accordance with other guidance issued by HHS. Cause – Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution is a new program with complex and evolving regulations and compliance requirements. Internal controls were not in place to ensure the Organization correctly applied the guidance. Identification as a repeat finding – Not a repeat finding. Recommendation – Policies and procedures over allowable activities and federal grant reporting should be modified to ensure expenditures charged to grants are for activities allowed and federal grant reports are prepared using complete and accurate information.

Health Center Program Cluster ? Assistance Listing Numbers 93.224 and 93.527 U.S. Department of Health and Human Services Award No. 6 H80CS04226-16-02 Program Year 2020 Criteria or Specific Requirement ? Reporting ? 45 CFR 75.342 Condition ? The Organization is required to prepare and submit an annual Uniform Data Set (UDS) report for each calendar year, and annual Federal Financial Report (FFR) for each grant year and quarterly Federal Cash Transaction Reports (FCTR) for each grant budget period. These reports are to be prepared using accurate financial information. Questioned costs ? None Context ? One report for each report type listed above was selected for testing with specific data from each report selected for testing. The sampling methodology used is not, and was not intended, to be statistically valid. Of the twenty-one inputs tested, three exceptions were noted related to the UDS report and one exception was noted related to the annual FFR. Effect ? Potential errors were made on the annual UDS and annual FFR reports. Cause ? The Organization?s policies and procedures did not identify certain errors that were noted on required reports. Turnover in key positions resulted in the Organization being unable to support three attributes selected for testing on the UDS report. Program reported on the annual FFR did not reflect the entirety of the Organization?s patient service revenue from activities within the scope of the health center program. Identification as a repeat finding ? Not a repeat finding Recommendation ? The Organization should revise policies and procedures over federal reporting to ensure reports are prepared using accurate information and supporting documentation for federal grant reports should be maintained.

Health Center Program Cluster ? Assistance Listing Numbers 93.224 and 93.527 U.S. Department of Health and Human Services Award No. 6 H80CS04226-16-02 Program Year 2020 Criteria or Specific Requirement ? Special Tests and Provisions: Sliding Fee Discounts ? 42 CFR 245(k)(3)(g); 42 CFR section 51c.303(g) and 42 CFR section 56.303(f). Condition ? Patients who were eligible for sliding fee discounts under the Organization?s policy were not given sliding fee discounts or received sliding fee discounts inconsistent with the policy. Questioned costs ? None Context ? A sample of 25 patients were tested out of the total population of 2,919 adjustments. The sampling methodology used is not, and is not intended to be, statistically valid. Of the 25 transactions tested, 2 were determined to include errors in the application of the sliding fee discount program and policy. Effect ? Improper sliding fee discounts were given and appropriate documentation was not maintained for all sliding fee discounts given. Cause ? The Organization did not comply with their sliding fee discount policy. Identification as a repeat finding ? Not a repeat finding Recommendation ? The Organization should continue to ensure all personnel understand the sliding fee scale policy and adhere to the requirements and guidelines set forth in the policy. Procedures should be implemented to ensure that eligible patients receive discounts in accordance with the sliding fee scale. Patient files should include documentation of eligibility to receive sliding fee scale discounts.