Auditor general flags grant, procurement and cash-control gaps in Wayne County FQHC audit; committee to follow up

Auditor General Marcy Cora told the Wayne County Commission Committee on Audit that an audit of the Wayne County Department of Health, Human and Veteran Services' federally qualified health centers (FQHC) found multiple control weaknesses and budget misalignments that require corrective action and follow-up.

Cora and audit staff said they reviewed 13 recommendations in the department's corrective action plan and determined management had taken sufficient action on six items, six recommendations remained in process and one was no longer applicable. The auditors reported that the FQHC's fiscal year 2025 grant award was about $2.2 million while the program was budgeted at $6.1 million and expenditures totaled about $7.8 million, a discrepancy auditors said created a risk that expenditures could outpace grant revenues.

The finding on budgeting prompted discussion about grant-year timing and system controls. Auditor staff noted the grant year runs through May 31 and the new grant year begins June 1, which can complicate year-to-year budgeting. County finance staff said the FY2026 budget is now set up in the county financial system to reflect actual grant awards and that they are monitoring to avoid further misalignment.

The audit also recommended reducing the burden on the general fund by ensuring chargebacks and budgeted general-fund support are reasonable and supported. Auditors said management plans to budget no more than $500,000 on a go-forward basis to cover salaries, fringes and chargebacks not covered by the federal grant. County staff described corrective entries taken after FY2025 to return excess general-fund contributions that had been allocated to the business unit.

Auditors raised procurement and contract controls, citing a rental agreement with a landlord (recorded in the transcript with inconsistent spellings) that had lapsed and, while the agreement was reapproved to expire Oct. 31, 2028, the Wayne County Healthy Communities program had been making monthly payments to the landlord and seeking reimbursement from the county via vouchers. Audit staff said that practice can sidestep the commission's role in approving procurements; county staff said the county will resume making direct payments, reconcile reimbursements already made by the program against the contract value, and ensure future payments flow through purchase orders so controls tied to contracts are enforced.

On patient-payment controls, auditors recommended policy changes to require someone other than the chief financial officer to open mail containing payments, to log mailed payments and to endorse checks immediately. Site visits found the Wayne County Healthy Communities accounting clerk opens mail separately and stores cash receipts and petty cash in separate, locked pouches, but auditors asked that those practices be formalized in written procedures. Auditors also recommended daily transaction reporting and reconciliation between the ECW (eClinicalWorks) EHR postings and a daily receipts log; audit testing found some checks did not reconcile between the EHR posting, check copies and deposit slips, which auditors attributed in part to timing differences. Jabar Jackson, CEO of the FQHC, said ECW is the EHR where payments are posted and staff reconcile postings to Excel logs and bank deposits.

Committee members asked about timing for follow-up reviews. Audit staff said follow-up engagements would be scheduled based on risk and suggested a follow-up within about six months to verify FY2026 closeout actions. Commissioner Queen and others pressed for a timely check given the bookkeeping and control items still in process.

Commissioner Garza moved, and Commissioner Peterson Mayberry supported, a motion to receive and file the auditor general's report and corrective action plan; the committee voted via tablet, the chair cast a yes vote, and the motion carried. No public comments were offered and the committee adjourned.

Next steps: auditors indicated a follow-up engagement will be scheduled based on risk, with an approximate six-month target to verify implementation of the corrective actions described in the presentation.