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.