Waikiki Health

Finding 2024.003: Special Tests and Provisions - Sliding Fee Scale Documentation - Significant Deficiency Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 - Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Assistance Listing Numbers: 93.224 Federal Award Identification Number and Year: H80CS00053 - 2023 and 2024, H8FCS41422 - 2023 Criteria Health centers are required to have a corresponding schedule of discounts applied and adjusted on the basis of patients' ability to pay and their eligibility. A patient's eligibility to pay is determined on the basis of the official poverty guideline, as revised by DHHS (42 CFR Sections 51c, 107(b)(5), 56.108(b)(5) and 56.303(f)). The Center should be implementing and monitoring procedures to properly determine, calculate and review sliding fee discounts issued to patients in accordance with the Center's sliding fee scale. Condition The Center did not always have the proper slide fee documentation readily available to ensure the proper slide fee discount was applied based on approved policies or the discount was calculated incorrectly. Cause The Center did not have adequate internal controls in place to effectively ensure that all sliding fee discounts were properly calculated based on approved documentation. Effect or Potential Effect The Center did not comply with the appropriate rules and regulations as per the Uniform Guidance. Questioned Costs None Context A test of 40 sliding fee discount transactions was performed and resulted in 20 instances where the Center was unable to provide approved documentation, or the sliding fee discount was calculated incorrectly. Our sample was a statistically valid sample. Identification of Repeat Finding This finding is a repeat finding (see prior year finding number: 2023.003) Recommendation The Center should establish a system of internal controls to ensure that all sliding fee discounts are properly calculated and supported based on family size and income. Views of Responsible Officials and Planned Corrective Actions Management agrees with the audit finding and will strengthen internal controls and accountability to correct the deficiency. Management has prepared a Corrective Action Plan that outlines the additional controls implemented.

Finding 2024.004: Allowable Costs/Activities Allowed or Unallowed - Significant Deficiency Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 - Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Assistance Listing Numbers: 93.224 Federal Award Identification Number and Year: H80CS00053 - 2023 and 2024, H8FCS41422 - 2023 Criteria In accordance with 2CFR 200.303(a), Internal Controls, a 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. The specific allowability requirements are unique to each federal program, in accordance with the terms and conditions of the federal award pertaining to the program. Condition Charges to federal awards for cash disbursements were not supported by illustration of proper approval. Cause The Center’s internal controls over cash disbursements were not consistently followed to ensure invoices were properly approved. Effect or Potential Effect Failure to ensure cash disbursements across programs have proper approval could result in noncompliance with the grant requirements or unallowable costs being charged. Questioned Costs None Context A test of 25 cash disbursement transactions was performed and resulted in four instances where the Center was unable to provide approved documentation. Our sample was a statistically valid sample. Identification of Repeat Finding This finding is a repeat finding (see prior year finding number: 2023.004) Recommendation The Center should establish a system of internal controls to ensure that all cash disbursements are properly approved. Views of Responsible Officials and Planned Corrective Actions Management agrees with the audit finding and will strengthen internal controls and accountability to correct the deficiency. Management has prepared a Corrective Action Plan that outlines the additional controls implemented.

Finding 2024.005: Procurement, Suspension and Debarment - Significant Deficiency Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 - Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Assistance Listing Numbers: 93.224 Federal Award Identification Number and Year: H80CS00053 - 2023 and 2024, H8FCS41422 - 2023 Criteria In accordance with §200.318(a), General Procurement Standards, a non-federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in General Procurement Standards. Additionally, §200.318(i) states that the non-federal entity must maintain records sufficient to detail the history of the procurement. In addition, in accordance with §200.213 and §180.300, non-federal entities cannot enter into awards, sub-awards, or contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition There was no evidence that the Center reviewed vendors for suspension and debarment in accordance with Uniform Guidance requirements. Cause The Center did not have adequate controls to illustrate review of vendors for any suspensions or debarment. Effect or Potential Effect The Center may procure goods and services from vendors that have been suspended or debarred from doing business with the federal government. Questioned Costs None Context We selected a sample of eight vendors for suspension and debarment testing. For all eight vendors tested, management did not provide adequate supporting documentation to support that the vendors were not suspended or debarred. Identification of Repeat Finding This finding is not a repeat finding. Recommendation The Center should develop a written procedure to review all vendors in accordance with the Uniform Guidance requirements for suspension and debarment. This procedure should be reviewed with the appropriate staff to ensure compliance with the requirement. Views of Responsible Officials and Planned Corrective Actions Management and the Board of Directors agree with the finding and will implement additional controls to ensure vendors are being reviewed for suspension and debarment and there is evidence of a formal review being performed.

Finding 2024.006: Reporting - Significant Deficiency Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 - Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Assistance Listing Numbers: 93.224 Federal Award Identification Number and Year: H80CS00053 - 2023 and 2024, H8FCS41422 - 2023 Criteria Health centers are required to have documentation that supports the amounts reported within the tables on the Health Resources and Services Administration Uniform Data Systems ("UDS") submission in accordance with the Office of Management and Budget Control No. 0915-0193. The Center should be implementing and monitoring procedures to properly determine, calculate and review the amounts that are reported on the UDS submission. Condition The Center did not have the proper documentation readily available to ensure that the calculations within the UDS reports were correct and accurate. Cause The Center did not have adequate internal controls in place to effectively ensure that all calculations within the UDS report were correct and accurate. Effect or Potential Effect The Center did not comply with the appropriate reporting rules and regulations as per the Uniform Guidance. Questioned Costs None Context A review of the UDS submission was performed and the Center was unable to provide documentation to support the tables within the report. Identification of Repeat Finding This finding is not a repeat finding. Recommendation The Center should establish a system of internal controls to ensure that all UDS related calculations are properly documented and maintained. Views of Responsible Officials and Planned Corrective Actions Management agrees with the audit finding and will strengthen internal controls and accountability to correct the deficiency.

Finding 2023.003: Special Tests and Provisions - Sliding Fee Scale Documentation - Significant Deficiency Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 - Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS00053 - 2022 and 2023, H8FCS41422 - 2023 Criteria Health centers are required to have a corresponding schedule of discounts applied and adjusted on the basis of patients' ability to pay and their eligibility. A patient's eligibility to pay is determined on the basis of the official poverty guideline, as revised by DHHS (42 CFR Sections 51c, 107(b)(5), 56.108(b)(5) and 56.303(f)). The Center should be implementing and monitoring procedures to properly determine, calculate and review sliding fee discounts issued to patients in accordance with the Center's sliding fee scale. Condition The Center did not always have the proper slide fee documentation readily available to ensure the proper slide fee discount was applied based on approved policies or the discount was calculated incorrectly. Cause The Center did not have adequate internal controls in place to effectively ensure that all sliding fee discounts were properly calculated based on approved documentation. Effect or Potential Effect The Center did not comply with the appropriate rules and regulations as per the Uniform Guidance. Questioned Costs None Context A test of 40 sliding fee discount transactions was performed and resulted in 15 instances where the Center was unable to provide approved documentation, or the sliding fee discount was calculated incorrectly. Our sample was a statistically valid sample. Identification of Repeat Finding This finding is not a repeat finding. Recommendation The Center should establish a system of internal controls to ensure that all sliding fee discounts are properly calculated and supported based on family size and income. Views of Responsible Officials and Planned Corrective Actions Management agrees with the audit finding and will strengthen internal controls and accountability to correct the deficiency. Management has prepared a Corrective Action Plan that outlines the additional controls implemented.

Finding 2023.004: Allowable Costs/Activities Allowed or Unallowed - Significant Deficiency Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 - Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS00053 - 2022 and 2023, H8FCS41422 - 2023 Criteria In accordance with 2CFR 200.303(a), Internal Controls, a 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. The specific allowability requirements are unique to each Federal program, in accordance with the terms and conditions of the Federal award pertaining to the program. Condition Charges to Federal awards for cash disbursements were not supported by illustration of proper approval. Cause The Center’s internal controls over cash disbursements were not consistently followed to ensure invoices were properly approved. Effect or Potential Effect Failure to ensure cash disbursements across programs have proper approval could result in noncompliance with the grant requirements or unallowable costs being charged. Questioned Costs None Context A test of 25 cash disbursement transactions was performed and resulted in 13 instances where the Center was unable to provide approved documentation. Our sample was a statistically valid sample. Identification of Repeat Finding This finding is not a repeat finding. Recommendation The Center should establish a system of internal controls to ensure that all cash disbursements are properly approved. Views of Responsible Officials and Planned Corrective Actions Management agrees with the audit finding and will strengthen internal controls and accountability to correct the deficiency. Management has prepared a Corrective Action Plan that outlines the additional controls implemented.

Health Center Program Cluster ? CFDA Nos. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. 6 H80CS00053-19-03 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 System (UDS) report for each calendar year, an 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 cost ? 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, four 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 ? One exception on the UDS was due to the Organization using the accrual basis instead of the cash basis for the preparation of Table 9E. Two errors on the UDS were a result of bad debt write-offs being improperly classified as sliding fee discounts on Table 9D. The final UDS error was due to the Organization being unable to provide documentation for one of the attributes selected for testing in Table 4. Program income 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 ? Repeat finding 2019-004. 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. Views of Responsible Officials and Planned Corrective Actions ? Management concurs with this finding. Policy and procedures over federal reporting has been written to ensure reports are prepared using accurate information and supporting documentation for federal grant reports are maintained. Waikiki Health did make the corrections that were mentioned in the 2021 UDS Report and will also have a correct FFR Program Income Calculations for FYE 01/31/2022. Individual responsible for planned corrective actions: Octavius D Gonzaga, Chief Financial Officer.

Health Center Program Cluster ? CFDA Nos. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. 6 H80CS00053-18-03 Program Year 2019 Criteria or Specific Requirement ? Special Tests and Provisions: Sliding Fee Discounts (42 USC 254(k)(3)(g); 42 CFR sections 51c.303(g); and 42 CFR sections 56.303(f)) Condition ? Patients were inappropriately given discounts under the Organization?s sliding fee policy and certain provisions of the Organization?s policy are not in compliance with the Health Center Compliance Manual. Questioned cost ? None Context ? The Organization is required to charge patients whose household income is below 100 percent of the Federal Poverty Guideline (FPG) a lower amount than the fee charged to the first sliding fee discount pay class above 100 percent of the FPG. The Organization?s policy currently allows for patients below 100 percent of the FPG and the first sliding fee discount pay class above 100 percent of the FPG to be charged the same amount for certain services. A sample of 40 patients were tested out of the total population of approximately 54,000 encounters. The sampling methodology used is not and is not intended to be statistically valid. Seven patients were not charged the proper fee according to the Organization?s sliding fee scale and two patients in a class above 100 percent of the FPG were charged an amount less than the pay class below 100 percent of the FPG would have been charged for the same services. Effect ? Certain patients were not given the proper sliding fee discounts. Cause ? Certain provisions of the Organization?s sliding fee policy are not in compliance with the Health Center Compliance Manual and certain discounts were given that were not in accordance with the Organization?s policy. Identification as a repeat finding ? Repeat findings 2018-003 and 2017-003. Recommendation ? Management should modify the sliding fee policy to ensure compliance with the Health Center Program Compliance Manual. In addition, we recommend management 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 adjustments. Views of Responsible Officials and Planned Corrective Actions ? Management concurs with this finding. The sliding fee policy has been modified to ensure compliance with the Health Center Program Compliance Manual. Management continues to ensure all personnel understand the sliding fee policy and adhere to the requirements and guidelines set forth in the policy. Sliding Fee Patients are now verified for the level of the Slide. New Policies and Procedures have been activated in FY 2020. Also, we have been able to pursue the State Sliding Fee payments because all our Sliding Fee Patients have Proof of Income. Planned timing for corrective actions: Procedures have been put in place and the CFO is also sharing the responsibility of keeping the policy and reporting updated by training the Assistant Controller as a backup; so there will be preparation and validation in our process. Individual responsible for planned corrective actions: Octavius Gonzaga, Chief Financial Officer

Health Center Program Cluster ? CFDA Nos. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. 6 H80CS00053-18-03 Program Year 2019 Criteria or Specific Requirement ? Reporting ? 45 CFR 75.342 Condition ? The Organization is required to prepare and submit an annual Uniform Data System (UDS) report for each calendar year, an 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 cost ? 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 nineteen inputs tested, four exceptions were noted related to the UDS report and two exceptions were noted related to the annual FFR. Effect ? Potential errors were made on the annual UDS and annual FFR reports. Cause ?One exception on the UDS was due to the Organization using the accrual basis instead of the cash basis for the preparation of Table 9E. The remaining three exceptions on the UDS occurred as the Organization was unable to provide supporting documentation for the attributes selected for testing. Program income reported on the annual FFR excluded pharmacy revenue and was not reported on a cumulative basis. Identification as a repeat finding ? Not a repeat finding. Recommendation ? The Organization should revised policies and procedures over federal reporting to ensure reports are prepared using accurate information and supporting documentation for federal grant reports should be maintained. Views of Responsible Officials and Planned Corrective Actions ? Management concurs with this finding. Policy and procedures over federal reporting has been written to ensure reports are prepared using accurate information and supporting documentation for federal grant reports are maintained. Views of Responsible Officials and Planned Corrective Actions - In all of our efforts to find the back up for the 2018 UDS Report filing all we were able to find were the submission files. But we do have the backup for 2019 UDS Report which we reported in March 2020. Planned timing for corrective actions: Policies and procedures have either been updated or created. We have created folders to keep documents organized and also now have a Data Analyst to assist and support Finance in our preparation of required files and reports. Individual responsible for planned corrective actions: Octavius Gonzaga, Chief Financial Officer

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